1) Recent Rates Movements
The UK gilts yield curve has exhibited distinct movement patterns across different timeframes, with varying degrees of steepening observed. Over the past day, the curve steepened by 2.75 basis points as the 30-year yield rose 4.01 basis points while the 2-year yield increased by only 1.26 basis points, with yields rising across all maturities. The past month showed a more modest steepening of 1.19 basis points, driven by the 30-year yield advancing 2.84 basis points compared to the 2-year yield's 4.03 basis point increase, notably with 5-year yields declining. Over the past year, the most pronounced steepening occurred at 68.71 basis points, as long-end yields surged with the 30-year up 20.58 basis points while short-end rates fell dramatically, with 2-year yields declining 48.13 basis points.
- Past day: Steepening move (+2.75bps spread change) with broad-based yield increases
- Past month: Modest steepening (+1.19bps spread change) despite mixed movements across tenors
- Past year: Significant steepening (+68.71bps spread change) reflecting divergent short and long-end dynamics
The consistent steepening pattern across all periods reflects evolving market expectations and monetary policy dynamics. The past year's dramatic curve steepening, with short rates falling while long rates rose, typically indicates expectations of monetary policy easing alongside concerns about longer-term inflation or fiscal sustainability. The more recent past day and past month steepening moves, while smaller in magnitude, suggest continued upward pressure on longer-term rates relative to shorter maturities. This pattern often reflects market anticipation of economic growth or inflation expectations that primarily affect longer-dated securities, while shorter-term rates remain anchored by current monetary policy expectations.