UK Gilt Yields Edge Higher

UK 10-year gilt yields edged up to 5.4%, tracking European peers higher as unrest in France heightened concerns over its fiscal outlook. Protests across several French cities escalated into clashes and looting, adding pressure on President Emmanuel Macron’s government ahead of the 2027 presidential election. Meanwhile, some major investors are betting that fiscal discipline will feature prominently in next week’s UK budget, supporting demand for gilts. M&G, Ninety One, Mediolanum and Raymond James Wealth Management have bought government bonds ahead of the October 28 announcement, positioning for yields to fall if Chancellor John Healey can reassure markets that government spending and borrowing remain under control. Since Andy Burnham became prime minister, UK gilt yields have risen less than those in other major markets, particularly France, where political turmoil has heightened fiscal concerns. Gilts have therefore remained relatively resilient.