UK Gilt Yields Ease but September Selloff Deepens

2026-09-30 09:38 By Joana Ferreira 1 min. read

UK 10-year gilt yields hovered below 5.4% at the end of September, slightly below a 19-year high reached earlier in the month, as markets became more cautious about further central bank rate hikes.

Despite this, gilts endured a sharp selloff over the month, with yields rising 23 bps.

Higher energy prices stoked inflation concerns, while expectations that the AI boom could support economic growth strengthened the case for higher-for-longer interest rates.

Market sentiment improved on Wednesday as central bankers pushed back against expectations of rapid and sustained tightening.

Bank of England policymaker Alan Taylor played down the need for rate hikes to address the UK’s energy crunch, contrasting with more hawkish comments earlier in the month from other MPC members, including Governor Andrew Bailey.

In the US, Fed's John Williams likewise said there was time to assess incoming data before raising rates again.

Meanwhile, upward revised figures showed UK GDP grew 0.5% in Q2.



News Stream
UK Gilt Yields Ease but September Selloff Deepens
UK 10-year gilt yields hovered below 5.4% at the end of September, slightly below a 19-year high reached earlier in the month, as markets became more cautious about further central bank rate hikes. Despite this, gilts endured a sharp selloff over the month, with yields rising 23 bps. Higher energy prices stoked inflation concerns, while expectations that the AI boom could support economic growth strengthened the case for higher-for-longer interest rates. Market sentiment improved on Wednesday as central bankers pushed back against expectations of rapid and sustained tightening. Bank of England policymaker Alan Taylor played down the need for rate hikes to address the UK’s energy crunch, contrasting with more hawkish comments earlier in the month from other MPC members, including Governor Andrew Bailey. In the US, Fed's John Williams likewise said there was time to assess incoming data before raising rates again. Meanwhile, upward revised figures showed UK GDP grew 0.5% in Q2.
2026-09-30
UK Gilt Yields Remain Near 19-Year Highs
UK 10-year gilt yields remained close to 19-year highs, hovering below 5.4%, as persistent inflation concerns and a more hawkish Bank of England stance continued to weigh on bonds. The government also paid its highest 10-year borrowing cost since 1999, selling £4.25 billion of 4.875% bonds maturing in July 2036 at an average yield of 5.383%, as investors demanded higher premiums amid inflation risks and expectations of increased government spending in next month’s budget. On the monetary policy front, BoE Deputy Governor Dave Ramsden said on Monday he would support rate hikes if inflationary pressures persist, echoing recent warnings from Governor Andrew Bailey. The MPC recently voted to hold rates at 3.75%, while warning inflation could peak around 4%. Markets are now pricing in a near 80% probability of a 25bp rate hike in November, with roughly four increases priced in by the middle of next year.
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UK 10Y Bond Yield Hits 19-year High
UK 10 Year Government Bond Yield increased to 5.44%, the highest since July 2007. Over the past 4 weeks, United Kingdom 10Y Bond Yield gained 29.31 basis points, and in the last 12 months, it increased 73.15 basis points.
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