Overview

• Thirty-year gilt yields rose to about 5.63% on Tuesday morning, topping Monday’s 5.61% peak, while 10-year yields hovered near recent highs around 4.7%.
• Traders now price fewer Bank of England cuts this year, with less than one move expected and only about a 40% chance of a November reduction, according to XTB.
• Analysts cite persistent inflation risks, concerns over the UK’s fiscal position and spending choices, and waning long-dated demand from pension funds as key drivers.
• BoE policymakers are reported to be considering a slower pace of quantitative tightening in response to the jump in long-dated borrowing costs.
• Rising yields are tightening fiscal headroom before the Autumn Budget and increasing political pressure on Chancellor Rachel Reeves.