Market insights
Recent rate movements
The gilts curve flattened in every period analysed. The spread is measured as the 30Y yield change minus the 2Y yield change, with the 2Y as the short rate and the 30Y as the long rate.
- Past day: Spread change = (+0.04) − (+0.93) = −0.89 bps, a FLATTENING move. The 2Y yield rose by 0.93 bps while the 30Y yield rose by only 0.04 bps.
- Past month: Spread change = (−10.36) − (−2.78) = −7.58 bps, a FLATTENING move. The 30Y yield fell by 10.36 bps, more than the 2Y yield's decline of 2.78 bps.
- Past year: Spread change = (+51.83) − (+113.34) = −61.51 bps, a FLATTENING move. Both yields rose, but the 2Y yield increased by 113.34 bps compared with 51.83 bps for the 30Y yield.
Because the spread narrowed in all three periods, the curve's shape moved consistently toward flatter. Over the past year, the flattening was driven mainly by a much larger rise at the short end, which is consistent with higher near-term interest rate levels being priced in relative to long-term yields. Over the past month, the flattening came from a larger fall in long-dated yields, which is generally associated with lower long-term growth or inflation expectations. Over the past day, the move was marginal, with the short end rising more than the long end. Taken together, the evidence shows a sustained flattening of the gilts curve over the year, with the short end carrying most of the repricing, though the data alone do not establish the underlying causes.
Spread to the 2-year
The 30-year spread to the 2-year yield stood at 101.67 bps on 23 October 2026, well below its typical range over the last twelve months. The reading sits beneath the lower anomaly threshold of 102.63 bps, roughly three standard deviations below the mean of about 149 bps, and is the lowest value in the series.
Over the past day, the spread narrowed by about 0.9 bps from 102.55 bps. Over the past month, it fell by about 7.6 bps from 109.24 bps. Over the past year, it declined by about 61.5 bps from 163.18 bps, with the steepest part of the decline occurring from late August into October 2026.
The compression indicates that the gap between long-dated and short-dated gilt yields has narrowed considerably, leaving the curve markedly flatter than its trailing one-year norm. Because the spread is a yield differential, this movement reflects a relative shift between the 30-year and 2-year segments rather than a uniform move across the curve. For bond investors, a sustained low spread of this kind reduces the term premium available for extending duration, which is relevant when assessing long-maturity gilts against shorter alternatives.