UK Gilt Yield Climbs as Rate-Hike Bets Persist
UK 10-year gilt yields surged back above 5.3% as oil prices rebounded and investors assessed preliminary September PMI data. Brent crude rose after five consecutive sessions of losses, with uncertainty surrounding US-Iran talks persisting as President Trump threatened further action against Iran while also suggesting that a deal could be reached soon. Meanwhile, the latest PMI survey showed that UK business activity continued to expand in September, although growth slowed slightly and came in below expectations. Despite the softer reading, markets are still pricing in a solid chance of a 25-basis-point Bank of England rate hike in November. In the US, much stronger-than-expected PMI data, pointing to the steepest expansion in business activity in more than five years, combined with a series of hawkish remarks from Federal Reserve policymakers, reinforced expectations of further monetary tightening. The outlook comes after the Fed raised rates last week for the first time since 2023.
3% as oil prices rebounded and investors assessed preliminary September PMI data. Brent crude rose after five consecutive sessions of losses, with uncertainty surrounding US-Iran talks persisting as President Trump threatened further action against Iran while also suggesting that a deal could be reached soon. Meanwhile, the latest PMI survey showed that UK business activity continued to expand in September, although growth slowed slightly and came in below expectations. Despite the softer reading, markets are still pricing in a solid chance of a 25-basis-point Bank of England rate hike in November.
In the US, much stronger-than-expected PMI data, pointing to the steepest expansion in business activity in more than five years, combined with a series of hawkish remarks from Federal Reserve policymakers, reinforced expectations of further monetary tightening. The outlook comes after the Fed raised rates last week for the first time since 2023.