UK Gilt Yields Ease

2025-12-03 12:02 By Joana Ferreira 1 min. read

The UK 10-year gilt yield fell to 4.45% after a recent surge, suggesting that Chancellor Rachel Reeves’ budget successfully eased the “doom-loop” pressure on gilts.

Investors see potential for yields to rise by around a percentage point without eroding the market’s headroom, while the budget’s deflationary measures could pave the way for additional Bank of England rate cuts.

Earlier this week, sovereign yields rose globally, led by Japan, after Bank of Japan Governor Kazuo Ueda indicated policymakers would assess the need for a rate hike at their upcoming meeting.

In the UK, the Bank of England is widely expected to cut rates by 25 basis points in December before pausing amid concerns of potential inflation re-acceleration.

Meanwhile, US markets fully price in a third Federal Reserve rate cut in December, with at least two further reductions anticipated in 2026, highlighting the diverging monetary policy trajectories across major economies.



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