UK 10-Year Gilt Yield Falls to 3-1/2-Month Low

2025-10-17 08:00 By Agna Gabriel 1 min. read

The UK 10-year gilt yield fell to 4.5%, its lowest since early July, as investors moved into safer assets amid growing global risk aversion.

Fears from the US banking sector intensified after Zions Bancorp and Western Alliance revealed losses linked to fraudulent loans tied to distressed property funds.

These worries, combined with the collapse of auto lender Tricolor and the bankruptcy of parts supplier First Brands, fueled broader concerns about credit market stress.

In the UK, yields also dropped after a surprise uptick in unemployment and dovish remarks from BoE Governor Andrew Bailey, who said the economy is operating “below potential” and the labor market is softening, with joblessness rising to 4.8%, the highest since 2021.

Traders are now fully pricing in a rate cut by February and see a possible move as soon as December.

Modest 0.1% GDP growth in August and anticipation of spending cuts and tax hikes in Chancellor Rachel Reeves’s Nov. 26 budget add to the cautious outlook.



News Stream
UK 10-Year Gilt Yield Pulls Back from 10-Week High
The UK 10-year gilt yield fell to around 4.505%, moving further away from the ten-week high of 4.5527% on January 28, as markets await the Bank of England policy meeting this week. Investors are positioned for the BoE to hold rates at 3.75% on Thursday, with officials expected to offer limited guidance on the timing of future cuts while inflation remains elevated. December inflation at 3.4%, the highest in the G7, and persistent concerns over underlying price pressures have led markets to scale back easing bets. Traders now price almost no chance of a cut this week and less than a 50% probability of more than one cut this year, compared with expectations for two cuts in mid-January. Recent UK data has been resilient, including an improvement in manufacturing PMI and steady economic momentum, supporting the view that the BoE can stay cautious.
2026-02-02
UK Gilt Yield at Two-Month High
The UK 10-year gilt yield stabilized just above 4.5%, close to its highest level since November 20, as markets anticipate that both the Bank of England and the Federal Reserve will likely keep rates on hold for the foreseeable future. In the UK, fresh BRC data showed accelerating price pressures, reinforcing concerns over sticky inflation and potentially limiting the Bank of England’s room to cut interest rates in the near term. However, a recent rally in the UK pound, driven by broad dollar weakness, may help ease imported inflation pressures and support inflation expectations, potentially offsetting some of the upward pressure from domestic price growth. Meanwhile, the Federal Reserve left interest rates unchanged, in line with expectations. Chair Jerome Powell indicated that the central bank is likely to maintain its current stance for some time, citing signs of stabilizing unemployment and inflation that remains somewhat elevated.
2026-01-29
UK 10Y Bond Yield Hits 5-week High
UK 10 Year Government Bond Yield increased to 4.55%, the highest since December 2025. Over the past 4 weeks, United Kingdom 10Y Bond Yield gained 5.47 basis points, and in the last 12 months, it decreased 8.51 basis points.
2026-01-28