Gilt Yields Slide as BoE Holds Rates and Pauses Bond Sales

2026-09-17 11:15 By Joana Ferreira 1 min. read

UK 10-year gilt yields fell further toward 5.2%, retreating from 19-year highs, after the Bank of England held rates and announced a six-month pause in bond sales under its quantitative tightening programme.

UK policymakers voted 6-3 to keep Bank Rate at 3.75% and warned that rates could rise if inflationary pressures intensify due to the conflict in the Middle East.

The MPC also unanimously voted to reduce its stock of government bond purchases to zero through a multi-year programme, with sales and maturities averaging £46 billion a year through 2034, below the £50 billion pace expected by markets.

The BoE expects inflation to reach twice its 2% target early next year, while raising its third-quarter GDP growth forecast to 0.4%.

Meanwhile, the Fed raised rates by 25 basis points yesterday, its first hike since July 2023, and signaled another increase later this year.

Oil prices fell for a second consecutive session but remained elevated amid continued uncertainty over the Middle East.



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Gilt Yields Slide as BoE Holds Rates and Pauses Bond Sales
UK 10-year gilt yields fell further toward 5.2%, retreating from 19-year highs, after the Bank of England held rates and announced a six-month pause in bond sales under its quantitative tightening programme. UK policymakers voted 6-3 to keep Bank Rate at 3.75% and warned that rates could rise if inflationary pressures intensify due to the conflict in the Middle East. The MPC also unanimously voted to reduce its stock of government bond purchases to zero through a multi-year programme, with sales and maturities averaging £46 billion a year through 2034, below the £50 billion pace expected by markets. The BoE expects inflation to reach twice its 2% target early next year, while raising its third-quarter GDP growth forecast to 0.4%. Meanwhile, the Fed raised rates by 25 basis points yesterday, its first hike since July 2023, and signaled another increase later this year. Oil prices fell for a second consecutive session but remained elevated amid continued uncertainty over the Middle East.
2026-09-17
UK Gilt Yields Ease Ahead of BoE Decision
UK 10-year gilt yields fell back to around 5.3% as oil prices declined for a second consecutive session, with investors also digesting yesterday’s Federal Reserve rate hike ahead of the Bank of England’s closely watched policy decision. Brent crude is trading around $105 a barrel after Saudi Arabia said it plans to restore roughly half the capacity of its damaged East-West pipeline within days. The Middle East outlook remains uncertain, however, keeping oil prices elevated and adding to the challenge for central banks as they seek to contain inflation without putting excessive pressure on economic activity. The BoE is widely expected to leave rates unchanged in a close decision, but markets will be watching for clues on the future policy path. In the US, the Fed raised rates by 25 basis points, the first increase since July 2023, and signaled another hike later this year amid persistent inflation pressures.
2026-09-17
UK Gilt Yields Ease as BoE Rate-Hike Bets Retreat
The UK 10-year gilt yield eased below 5.35%, retreating from recent 19-year highs, as the oil price rally paused and an in-line UK inflation report prompted traders to scale back expectations for further Bank of England rate hikes. UK annual inflation accelerated to 3.1% in August, as widely expected, from 2.9% in July, largely reflecting higher fuel costs. Core CPI was unchanged at 2.6%, while services inflation, a key focus for the Bank of England, came in at 3.4%, slightly below the 3.5% expected. No change to UK interest rates is expected at Thursday's meeting, while a hike remains broadly priced for November, albeit with less conviction. Further out, markets have also scaled back expectations for hikes through the end of next year, with four now priced comfortably versus five previously. Elsewhere, oil prices eased from four-month highs following a surprise rise in US crude inventories, despite widening supply disruptions across the Middle East.
2026-09-16