End of Day Wrap-Up

UK gilt yields fell sharply across the curve today, leading to lower PWLB rates at most maturities, as markets responded to the Bank of England’s policy decisions and communication.

GILT MOVE SUMMARY

• → 1y: 4.108% (+2bp) — short end slightly higher, diverging from the broader curve.
• → 5y: 4.801% (-4bp) — modest decline, beginning a downward move from the belly out.
• → 10y: 5.160% (-6bp) — declines deepen in the belly.
• → 30y: 5.739% (-12bp) — long end leads the rally, with the largest falls seen in ultra-long maturities.
• → 50y: 5.199% (-18bp) — ultra-long yields drop most, marking a pronounced bull steepening.

PWLB CLOSE SNAPSHOT

WHAT DROVE TODAY

• → Bank of England held rates at 3.75% (Actual: 3.75%, Forecast: 3.75%, Previous: 3.75%), with a 6–3 vote split, but signalled the likelihood of future hikes if inflation persists.
• → BoE announced an end to long-term gilt sales, surprising markets and triggering a rally in long-dated gilts as traders reassessed supply expectations.
• → No other major UK data releases influenced the market; the move was primarily policy-driven.

WHAT THIS MEANS

• → PWLB rates ended lower across most maturities, especially at the long end, reflecting the gilt rally.
• → Short-dated PWLB rates were steady to slightly higher, diverging from the broader downward move.
• → Borrowing costs for longer-term local authority loans fell modestly by the close.

NEXT ON THE DIARY

• → 07:00 Friday: GBP Retail Sales MoM (Forecast: -0.20%)
• → 07:00 Friday: GBP Retail Sales YoY (Forecast: 1.90%)

Markets responded decisively to the Bank of England’s policy signals, with the long end of the curve leading a rally that eased borrowing costs for local authorities.

This commentary is for information only and does not constitute financial advice. Always verify rates directly with PWLB or official sources before making borrowing decisions.