Market Insights

The UK gilts yield curve has exhibited distinct steepening movements across all analyzed periods. Over the past day, yields rose across all maturities with the spread change of +3.0bps (4.35bps increase in 30Y minus 1.37bps increase in 2Y), indicating a steepening move as longer-dated bonds underperformed significantly. Over the past month, despite yields declining broadly, the curve steepened by -8.0bps (-12.33bps change in 30Y minus -4.33bps change in 2Y), as short-term rates fell less than long-term rates. Over the past year, the most pronounced steepening occurred with a spread change of +64.7bps (-20.13bps change in 30Y minus -84.78bps change in 2Y), reflecting substantial outperformance of short-dated gilts.

• Past day: Steepening move (+3.0bps spread change) with broad-based yield increases
• Past month: Steepening move (-8.0bps spread change) despite overall yield declines
• Past year: Significant steepening (+64.7bps spread change) with dramatic short-end rally

The consistent steepening pattern across all timeframes suggests evolving market expectations regarding monetary policy and economic conditions. The past year's dramatic steepening, driven by an 85bps decline in 2-year yields compared to just 20bps for 30-year bonds, likely reflects expectations of significant policy easing by the Bank of England. This pattern typically indicates market anticipation of lower short-term interest rates while maintaining relatively stable long-term inflation and growth expectations, consistent with a monetary policy response to economic softening.