UK Gilt Yields Steady Near 4.8% as Rate Hike Expectations Ease

2026-07-03 15:21 By Joana Ferreira 1 min. read

UK 10-year gilt yields hovered just below 4.8% as the Bank of England’s dovish stance and weaker-than-expected US jobs data led investors to scale back rate hike expectations for both the UK and US.

Despite this, yields rose 6 basis points for the week as traders adjusted positions after the initial drop following the US-Iran deal, with additional upward pressure from rising long-term yields in Japan amid concerns over increased spending.

On monetary policy, Bank of England Governor Andrew Bailey maintained a cautious tone, highlighting a slowing UK economy and stating the BoE would not rush to respond to rising oil prices.

He noted inflation remains on track to reach 2%, though later than previously expected, while ruling out near-term rate cuts.

Meanwhile, Fed Chair Kevin Warsh noted easing inflation expectations but reaffirmed the Fed’s 2% target.

US jobs data showed only 57,000 jobs added last month, with unemployment falling to 4.2% as workers left the labor force.



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UK Gilt Yields Steady Near 4.8% as Rate Hike Expectations Ease
UK 10-year gilt yields hovered just below 4.8% as the Bank of England’s dovish stance and weaker-than-expected US jobs data led investors to scale back rate hike expectations for both the UK and US. Despite this, yields rose 6 basis points for the week as traders adjusted positions after the initial drop following the US-Iran deal, with additional upward pressure from rising long-term yields in Japan amid concerns over increased spending. On monetary policy, Bank of England Governor Andrew Bailey maintained a cautious tone, highlighting a slowing UK economy and stating the BoE would not rush to respond to rising oil prices. He noted inflation remains on track to reach 2%, though later than previously expected, while ruling out near-term rate cuts. Meanwhile, Fed Chair Kevin Warsh noted easing inflation expectations but reaffirmed the Fed’s 2% target. US jobs data showed only 57,000 jobs added last month, with unemployment falling to 4.2% as workers left the labor force.
2026-07-03
UK Gilt Yield Trim Gains on Weak US Jobs Data
UK 10-year gilt yields fell back below 4.8% as weaker-than-expected US jobs data prompted investors to scale back expectations for further Federal Reserve rate hikes. The US economy added just 57,000 jobs last month, well below forecasts, while the unemployment rate unexpectedly fell to 4.2% as many people left the labor force. Investors also assessed remarks from central bankers at the ECB's Sintra Forum. Bank of England Governor Andrew Bailey maintained a dovish tone, pointing to a slowing UK economy while stressing that persistent inflation risks rule out near-term rate cuts. Meanwhile, Fed Chair Kevin Warsh said inflation expectations had eased in recent weeks but reaffirmed the Fed's commitment to returning inflation to its 2% target. Elsewhere, improving prospects for indirect US-Iran talks, with Qatar expected to schedule the next round soon, helped push oil prices lower as shipping through the Strait of Hormuz remained largely uninterrupted.
2026-07-02
Gilt Yields Follow US Treasuries Higher Before Jobs Data
UK 10-year gilt yields rose to 4.8%, hitting a one-week high as they followed US Treasury yields higher, with investors awaiting US jobs data later in the day. Markets also digested remarks from central bankers at the ECB’s Sintra Forum. Bank of England Governor Andrew Bailey maintained a dovish tone, citing a softening UK economy but ruling out near-term rate cuts due to lingering inflation risks. Meanwhile, Fed Chair Kevin Warsh noted that inflation expectations have eased recently, though he reaffirmed the Fed’s commitment to its 2% target. UK political shifts are unlikely to impact sterling until late July, when Andy Burnham is expected to take office as Prime Minister. Elsewhere, markets welcomed progress in indirect US-Iran talks, with Qatar set to schedule the next meeting soon, while oil prices continued to decline as more shipments moved through the Strait of Hormuz.
2026-07-02