Market insights
Recent rate movements
- Using the 2Y yield as the short rate and the 30Y yield as the long rate, the gilt curve flattened in every period. Over the past day, Spread Change = (+0.01) - (+0.42) = -0.41bps, a FLATTENING move. The 2Y yield rose 0.42bps while the 30Y yield was almost unchanged.
- Over the past month, Spread Change = (-17.44) - (+2.29) = -19.74bps, a FLATTENING move. The 30Y yield fell 17.44bps while the 2Y yield edged up 2.29bps.
- Over the past year, Spread Change = (+52.59) - (+111.27) = -58.68bps, a FLATTENING move. Both yields rose, but the 2Y yield increased by more than twice the 30Y move.
Across all three periods, the verified move type is consistently FLATTENING, meaning the gap between short and long gilt yields has narrowed. A flattening curve indicates that short-term rates have risen relative to long-term rates, which typically reflects changes in expectations for policy rates, inflation and growth. The data alone does not show which factor dominated.
- Past day: The 0.41bps flattening is marginal, suggesting little change in the relative pricing of near-term and longer-term rates.
- Past month: The decline in long-end yields, with only a small rise at the short end, points to long-term yields falling relative to near-term rates.
- Past year: The larger rise in 2Y yields indicates that short-term rates repriced upward more than long-term rates.
Spread to the 2-year
The 30Y-2Y gilt yield spread stood at 101.26 bps on 26 October 2026, which is unusually low relative to the previous 12 months. The reading sits at the bottom of the observed range and below the lower threshold of the anomaly band, which is about 101.5 bps.
Over the past day, the spread narrowed by roughly 0.4 bps from 101.66 bps on 23 October. Over the past month, it fell by about 20 bps from 120.99 bps on 25 September, and it has declined in most sessions since early October. Over the past year, the spread has compressed by about 56 bps from 157.63 bps on 27 October 2025. It peaked at 178.60 bps on 9 February 2026 and has trended lower since.
The compression means the gap between long-dated and short-dated gilt yields has narrowed to its lowest level in the period analysed, so the curve is markedly flatter than a year ago. Investors are receiving less additional yield for holding 30-year gilts over 2-year gilts, which implies a lower term premium at the long end. Because the spread is a relative measure, the data alone do not show whether the move reflects a fall in 30-year yields, a rise in 2-year yields, or both.