1) Recent Rates Movements
The UK gilts yield curve has exhibited distinct steepening movements across all analyzed periods, with long-term yields consistently rising more than short-term rates.
- Past day: The curve steepened by 3.25 basis points (30Y +2.73bps minus 2Y -0.52bps), with yields rising across most maturities while 2-year rates declined slightly.
- Past month: A steepening of 2.07 basis points occurred (30Y +5.57bps minus 2Y +3.50bps), as all tenors posted positive yield changes with longer maturities advancing more substantially.
- Past year: The most pronounced steepening of 70.76 basis points materialized (30Y +19.90bps minus 2Y -50.85bps), driven by significant short-end declines contrasting with long-end increases.
This consistent steepening pattern across timeframes reflects evolving market dynamics and economic expectations.
- Past day: The modest steepening suggests near-term policy rate expectations may be stabilizing while longer-term growth or inflation concerns persist.
- Past month: The broad-based yield increases with greater long-end sensitivity indicate potential shifts in term premium or economic outlook affecting duration risk pricing.
- Past year: The dramatic steepening reflects a fundamental repricing, with substantial short-rate declines likely reflecting monetary policy easing expectations, while rising long-term yields suggest concerns about fiscal sustainability, inflation expectations, or economic growth prospects affecting the term structure.