Britain’s 10-year Gilt topped 2.1% in mid-August, close to levels not seen in nearly a month, after fresh GDP figures showed the British economy shrank less than expected in Q2. The UK GDP contracted 0.1% in Q2 and 0.6% in June only, with both readings coming half the market forecasts and strengthening the case for the BoE to continue raising rates to control surging inflation which holds at levels not seen in 40 years and is worsening the cost of living crisis. The central bank already raised rates six times by a total of 165bps since November last year when it started its tightening cycle, but warned the economy will probably fall into recession by the end of this year.
Historically, the United Kingdom Government Bond 10Y reached an all time high of 16.09 in November of 1981. United Kingdom Government Bond 10Y - data, forecasts, historical chart - was last updated on August of 2022.
The United Kingdom Government Bond 10Y is expected to trade at 2.17 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 2.59 in 12 months time.