1) Recent Rates Movements
The UK gilts yield curve has exhibited distinct movements across different timeframes, with the most pronounced changes occurring over the past year.
- Past day: The curve experienced a flattening move with a spread change of -3.24bps (30Y: -0.75bps minus 2Y: +2.49bps), as short-term yields rose while long-term yields declined slightly.
- Past month: A steepening occurred with a spread change of -12.30bps (30Y: -26.88bps minus 2Y: -14.59bps), though all yields declined, with longer maturities falling more substantially than shorter ones.
- Past year: The curve demonstrated significant steepening with a spread change of +87.36bps (30Y: +50.61bps minus 2Y: -36.75bps), reflecting divergent movements where short-term yields fell while long-term yields rose considerably.
These movements reflect evolving market conditions and monetary policy expectations across different horizons. The past day's flattening suggests near-term policy uncertainty, while the past month's steepening amid broad yield declines indicates expectations of monetary easing with concerns about longer-term fiscal sustainability. The past year's dramatic steepening, with 2-year yields falling 37bps while 30-year yields rose 51bps, reflects the market's adjustment to changing inflation expectations and fiscal policy concerns. This pattern typically indicates expectations of near-term monetary accommodation while longer-term inflation and fiscal risks remain elevated, consistent with the UK's economic challenges including persistent inflation pressures and fiscal sustainability concerns.
2) Trends and Anomalies
Over the past 6 month(s), the volume of T27A on LSE was unusually high, with the latest daily volume on 2025-10-24 of 10,757,790. This value falls outside the expected range (defined as within 3 standard deviations of the mean) based on historical data. The high trading volume for this bond suggests heightened market activity and interest around this particular gilt.