UK 30-Year Treasury Gilt Highest since 1998

2025-01-07 14:34 By Agna Gabriel 1 min. read

The UK 30-year gilt yield rose to 5.27%, its highest level since 1998, after the UK’s Debt Management Office auctioned £2.25 billion in 30-year bonds at a yield of 5.198% as concerns over ballooning national debt and expectations of fewer rate cuts by Bank of England weighted on demand.

The Labour government plans to issue £297 billion in bonds this fiscal year, the second-highest total on record.

At the same time, traders now anticipate fewer interest rate cuts from the BoE, with just two 25bps reductions expected this year, down from previous forecasts of more than three at the start of last month.

Still, the auction sent mixed signals regarding demand.

Although its oversubscription rate, with a bid-to-cover ratio of 2.75, was the lowest since December 2023, the tail—the difference between the average and the lowest accepted yield—was just 0.3 bps, suggesting strong interest in the notes.



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