PWLB briefing
Morning Rate Update
PWLB rates reset lower this morning, with declines of 2–6bp across the curve following a hotter-than-expected UK inflation print.
⚠ RATE ALERT — AM PWLB rates fell 2–6bp across all maturities after September UK inflation came in above forecast.
PWLB rates drop despite inflation surprise as market eyes BoE
PWLB Snapshot
| Tenor | Rate | Chg |
|---|---|---|
| 1y | 5.54% | -1bp |
| 3y | 5.86% | -2bp |
| 5y | 6.04% | -2bp |
| 10y | 6.39% | -3bp |
| 25y | 6.81% | -4bp |
| 50y | 6.49% | -6bp |
Parallel downward move, with the largest declines at the long end.
What Moved
- → Long end leads — 50y and 40y rates fell 5–6bp, outpacing the 2–4bp declines seen across the rest of the curve.
- → Broad-based move — All maturities reset lower, with no segment left unchanged.
Context
- → UK September inflation surprised to the upside — CPI YoY at 3.50% (forecast: 3.40%, previous: 3.10%), Core CPI YoY at 2.80% (forecast: 2.70%, previous: 2.60%).
- → Market focus on BoE — News flow highlights expectations of a near-term rate hike after the inflation beat.
- → UK public borrowing remains elevated — Latest data and headlines point to higher-than-expected government borrowing ahead of next week's Budget.
Calendar Events
Today's Releases
- → UK Inflation Rate YoY (07:00): 3.50% (forecast: 3.40%, previous: 3.10%) — Above expectations, reinforcing pressure on BoE policy.
- → UK Core Inflation Rate YoY (07:00): 2.80% (forecast: 2.70%, previous: 2.60%) — Also above forecast, supporting the headline surprise.
- → UK PPI Output YoY (07:00): 4.60% (forecast: 4.30%, previous: 3.80%) — Producer prices also running hotter than expected.
Remaining Today
- → 14:00: BoE Governor Bailey Speech (no forecast) — Market will watch for any signals on policy response.
Next 48 Hours
- → Fri 23 Oct 07:00: UK Retail Sales MoM — Forecast: -0.10%
- → Fri 23 Oct 09:30: UK S&P Global Services PMI Flash — Forecast: 51.8
- → Fri 23 Oct 09:30: UK S&P Global Manufacturing PMI Flash — Forecast: 51.7
⚑ Treasurer's Note — The PWLB curve reset lower by 2–6bp this morning, with the largest moves at the long end (50y -6bp). This drop comes despite UK inflation surprising to the upside, keeping the focus squarely on the Bank of England's next move. If you are watching for the next reset, be aware that market volatility remains elevated and further data this week could shift the tone again.
This commentary is provided for information only and is not financial advice. Please verify rates directly with PWLB or official sources before acting.
Gilt Edge Advisor — still here after more Budgets than the Treasury has red boxes.