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

2025-10-21 08:20 By Agna Gabriel 1 min. read

The UK 10-year gilt yield edged down to around 4.5%, nearing its lowest level since July, as investors digested the latest public borrowing data and assessed the UK’s fiscal outlook.

Government borrowing totaled £99.8 billion in the first half of the fiscal year, £7.2 billion above the OBR’s projection, though the gap narrowed from the previous month after an ONS correction to VAT data.

The figures underscored ongoing fiscal pressures ahead of Chancellor Rachel Reeves’s November 26 budget, expected to feature tax hikes and spending cuts.

September borrowing alone reached £20.2 billion, the second-highest on record for that month.

Rising debt-servicing costs and weak tax receipts highlight the challenge Reeves faces in restoring fiscal discipline.

Meanwhile, yields have been weighed by dovish remarks from BoE Governor Andrew Bailey, who cited a softening labor market and rising unemployment to 4.8%, reinforcing expectations for a rate cut early next year.



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