UK 10-Year Gilt Yields Stabilize

2025-12-05 09:04 By Joana Ferreira 1 min. read

The UK 10-year gilt yield steadied around 4.45% after an early-December spike, signaling that Chancellor Rachel Reeves’ budget has alleviated some of the “doom-loop” pressures weighing on government bonds.

Investors are also positioning ahead of potential interest rate cuts in both the US and UK later this month.

Market participants see room for yields to rise by roughly a percentage point without straining demand, while the budget’s deflationary measures could support further Bank of England easing.

The BoE is widely expected to trim rates by 25 basis points in December, though the decision is likely to be closely split, with Governor Andrew Bailey poised to cast the deciding vote amid four hawkish members wary of persistent inflation.

Across the Atlantic, US markets are fully pricing in a third Federal Reserve rate cut on Wednesday, with at least two additional reductions anticipated in 2026.



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