UK 10-Year Gilt Yields Hit Fresh One-Month Low

2026-02-18 08:24 By Joana Ferreira 1 min. read

UK 10-year gilt yields fell to 4.37%, their lowest since January 14, as investors weighed new inflation figures and the outlook for the Bank of England’s monetary policy.

Data from the Office for National Statistics showed annual inflation cooled to 3.0% in January, the weakest reading since March 2025, driven mainly by slower increases in transport and food prices.

Core inflation also edged down to 3.1%, its lowest level since August 2021.

The figures followed a weaker-than-expected labor market update.

Average weekly earnings, including bonuses, rose 4.2% in the three months to December, the slowest pace since the period to August 2024 and below forecasts, while the unemployment rate climbed to 5.2%, its highest since early 2021.

In response, traders stepped up expectations for rate cuts, fully pricing in a 25-basis-point reduction by April and assigning better than a 75% probability to a move as early as March.

Two cuts are now fully priced in by November.



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