1) Recent Rates Movements
The UK gilts yield curve has experienced notable movements across different timeframes, with varying directional changes at each maturity. Over the past day, the curve exhibited a steepening bias with the spread change of +4.22bps (30Y: +7.18bps minus 2Y: +2.97bps), indicating long-term yields rose more than short-term rates. The past month showed a more pronounced steepening pattern with a spread change of +14.93bps (30Y: +35.69bps minus 2Y: +20.75bps), as yields increased across all maturities but with greater magnitude at the long end. The past year demonstrated the most dramatic steepening movement with a spread change of +135.15bps (30Y: +117.49bps minus 2Y: -17.65bps), driven by falling short-term yields contrasting sharply with rising long-term yields.
The consistent steepening pattern across all three periods reflects evolving market expectations regarding monetary policy and economic conditions. The past day's modest steepening suggests ongoing market adjustments to policy signals or economic data releases. The past month's steepening, with yields rising across the curve but more significantly at longer maturities, indicates increased long-term inflation expectations or term premium demands from investors. The past year's substantial steepening, characterized by declining 2-year yields alongside rising long-term rates, suggests markets have priced in expectations of monetary policy easing in the near term while maintaining concerns about longer-term fiscal sustainability or inflation risks. This pattern typically reflects a transition in economic cycle expectations, with short-term policy accommodation contrasting with longer-term structural concerns.