UK Gilt Yields Fall to Six-Week Low
UK 10-year gilt yields fell further below 5.3%, reaching their lowest level since September 22, as declining oil prices and expectations surrounding the Bank of England’s policy decision later this week supported the bond market. Brent crude fell below $110 a barrel following reports that US President Donald Trump was prepared to give diplomatic efforts with Iran more time before considering further military action after Tuesday’s midterm elections. Meanwhile, investors continued to welcome Chancellor John Healey’s first budget announcement last week, which adhered to the government’s self-imposed borrowing rules and largely reassured markets. The Bank of England is widely expected to deliver its first interest rate hike since 2023 on Thursday, amid mounting inflationary pressures linked to the Iran war and signs of resilience in the UK economy. However, policymakers are also expected to push back against market expectations of several additional rate increases next year.
UK 10-year gilt yields fell further below 5.3%, reaching their lowest level since September 22, as declining oil prices and expectations surrounding the Bank of England’s policy decision later this week supported the bond market. Brent crude fell below $110 a barrel following reports that US President Donald Trump was prepared to give diplomatic efforts with Iran more time before considering further military action after Tuesday’s midterm elections. Meanwhile, investors continued to welcome Chancellor John Healey’s first budget announcement last week, which adhered to the government’s self-imposed borrowing rules and largely reassured markets.
The Bank of England is widely expected to deliver its first interest rate hike since 2023 on Thursday, amid mounting inflationary pressures linked to the Iran war and signs of resilience in the UK economy. However, policymakers are also expected to push back against market expectations of several additional rate increases next year.