UK Gilt Yields Climb on Expectations of Further BoE Rate Hikes

2026-11-13 10:38 By Joana Ferreira 1 min. read

UK 10-year gilt yields rose above 5.3%, reaching its highest level since late October, while the two-year gilt yield climbed above 5%, its highest since October 2023, as investors ramped up expectations of further Bank of England rate hikes.

The move followed stronger-than-expected economic data showing that UK GDP grew 0.2% in September, prompting markets to reassess the monetary policy outlook.

The UK economy has remained relatively resilient this year, supported in part by investment in AI and productivity gains from its adoption, despite the energy supply shock caused by conflicts in the Middle East and Ukraine.

According to LSEG data, markets now price in an over 80% chance of a BoE rate hike in December, up from 50% at the start of the week.

Investors also fully expect three additional rate increases by mid-2027, following the hike delivered in November.

Meanwhile, strong US inflation data has also pushed Treasury yields higher and strengthened Fed rate hike bets.



News Stream
UK Gilt Yields Climb on Expectations of Further BoE Rate Hikes
UK 10-year gilt yields rose above 5.3%, reaching its highest level since late October, while the two-year gilt yield climbed above 5%, its highest since October 2023, as investors ramped up expectations of further Bank of England rate hikes. The move followed stronger-than-expected economic data showing that UK GDP grew 0.2% in September, prompting markets to reassess the monetary policy outlook. The UK economy has remained relatively resilient this year, supported in part by investment in AI and productivity gains from its adoption, despite the energy supply shock caused by conflicts in the Middle East and Ukraine. According to LSEG data, markets now price in an over 80% chance of a BoE rate hike in December, up from 50% at the start of the week. Investors also fully expect three additional rate increases by mid-2027, following the hike delivered in November. Meanwhile, strong US inflation data has also pushed Treasury yields higher and strengthened Fed rate hike bets.
2026-11-13
UK Gilt Yields Rise From Over Two-Month Lows
The yield on 10-year UK government bonds rose toward 5.3%, recovering from lows not seen in more than two months, as investors assessed strong UK economic data. Oil prices also stabilized, with Brent crude regaining some ground following sharp declines in recent sessions. Data from the ONS showed that the UK economy expanded by 0.7% in the third quarter, accelerating from 0.5% growth in the previous quarter and matching market expectations. On an annual basis, growth accelerated to 1.9% from 1.4%, also in line with forecasts, while monthly GDP rose by 0.2% in September, exceeding expectations. The resilient data strengthened expectations of further Bank of England tightening, with markets pricing in another rate hike before year-end and a further increase by March. In the US, stronger-than-expected inflation and hawkish Fed commentary reinforced expectations of a December rate hike, while raising the possibility of a more aggressive 50-basis-point increase.
2026-11-12
UK Gilt Yields Steady as BoE Rate Hike Bets Intensify
The yield on 10-year UK government bonds stabilized around 5.2% following the previous session’s selloff, as investors assessed a quiet economic calendar and stronger-than-expected US inflation data, which reinforced expectations of further Fed tightening. Brent crude also paused its recent decline amid renewed shipping tensions in the Strait of Hormuz. Meanwhile, expectations of further BoE tightening have increased, with markets leaning towards another rate hike in December. Deputy Governor Clare Lombardelli warned that consecutive increases remain possible, highlighting persistent wage pressures and the risk of second-round inflationary effects. Investors are now increasingly pricing in another hike before year-end and a further increase by March, potentially putting renewed pressure on gilts. Investors are now turning their attention to UK third-quarter GDP report due Thursday.
2026-11-11