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2025-09-18 19:19:40
UK 10-Year Gilt Yield Falls After BoE Decision (⑴) On Thursday, the UK 10-year gilt yield fluctuated to 4.62%. Earlier, the Bank of England (BOE) maintained its benchmark interest rate at 4%, as expected, and slowed the pace of quantitative tightening. The Monetary Policy Committee voted 7-2 to keep interest rates unchanged, a move widely anticipated by the market. (⑵) The BoE also reduced its annual reduction in long-term government bonds from £100 billion to £70 billion. This slowdown in balance sheet reduction aligns with recent pressure on long-term bonds. Fiscal concerns have kept UK 10-year and 30-year gilt yields higher than those of other major G7 economies. (⑶) Furthermore, expectations that the UK Debt Management Office may increase government bond supply in the near future have pushed interest rate swap yields below those of similar-maturity gilts, further reflecting fiscal pressures.
