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.



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