18.08.202510:43:58UTC+00UK 10-Year Gilt Yield Edges Down

The UK 10-year gilt yield moderated to 4.691% as focus shifts to upcoming inflation figures, retail sales, and preliminary Purchasing Managers' Index (PMI) data. This follows a nearly 10 basis point increase last week, driven by robust GDP and employment numbers that have cast uncertainty on the likelihood of additional Bank of England rate cuts this year. In its most recent decision, the BoE reduced rates by 25 basis points to 4% in a closely contested 5-4 vote, as some policymakers expressed concerns that persistent inflation might constrain further easing. Market participants anticipate a potential decline in yields if inflation reports come in lower than expected, potentially reviving speculation around rate cuts. Predictions suggest the Consumer Price Index (CPI) will rise to 3.7% in May, marking the highest level since January 2024, with core inflation holding steady at the same rate. Retail sales are projected to increase by 0.6% for the second consecutive month, while PMIs are expected to indicate stronger performance in the services sector and a slowdown in the manufacturing contraction. On the global stage, investors are awaiting remarks from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium, along with the release of Fed minutes, as market sentiment leans towards a potential rate cut in September.