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2026-07-16 17:36:13
[UK 10-Year Government Bond Yield Holds Steady at Near Two-Month High, Supported by Economic Data and Rate Hike Expectations] ⑴ The yield on 10-year UK government bonds held steady at around 4.97%, near the two-month high reached earlier this week. Resilient economic data and rising oil prices strengthened market expectations for a Bank of England rate hike later this year. ⑵ UK economic growth was 0.1% in May, reversing the 0.1% contraction in April. GDP growth for the three months to May was 0.7%, higher than the expected 0.5%. The market is currently fully pricing in a rate hike in November and expects another hike before March 2027. ⑶ This outlook contrasts with the cautious remarks of Bank of England policymaker Briden, who believes that weak UK economic conditions and labor market conditions reduce the need for further tightening, despite the inflationary risks posed by the Iranian conflict. ⑷ Bond yields remained below 5%, and reports that Home Secretary Mahmoud will become Chancellor of the Exchequer in the new Prime Minister Burnham government eased market concerns about expansionary fiscal policy.
