UK Gilt Yields Edge Higher on Stronger GDP Data

2026-01-15 08:39 By Joana Ferreira 1 min. read

The UK 10-year gilt yield rose to 4.37%, attempting to recover from a one-year low hit on Wednesday, as investors scaled back expectations of Bank of England rate cuts following stronger-than-expected GDP data.

UK GDP grew 0.3% in November, rebounding from a 0.1% contraction in October and surpassing forecasts of a 0.1% increase.

Over the three months to November, GDP expanded 0.1%, defying expectations of a 0.2% contraction.

Market expectations for monetary easing have shifted slightly.

Traders now price in roughly 46 basis points of cuts by year-end, with an 84% probability of a second 25-basis-point reduction in December.

A first cut remains fully priced in by June, with an 88% chance of occurring in April.

Prior to the GDP release, expectations had priced in just under 48 basis points of easing for the remainder of the year, with 23 basis points by April.



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