2025.09.1208:08:05UTC+00UK 10-Year Gilt Yield Falls Toward 1-Month Low

The yield on the UK's 10-year government bond dipped below 4.6%, marking its lowest point in a month, following reports that the economy experienced no growth in July, in line with predictions. The economic expansion for the three months leading up to July recorded a 0.2% increase, consistent with expectations. However, there was an unexpected decline in industrial and manufacturing output, coupled with a slight widening of the trade deficit. This weak data exerted additional downward pressure on bond yields as investors considered the implications for fiscal and monetary policy. Chancellor Rachel Reeves is planning further tax increases in November to address a new multibillion-pound budget shortfall, raising concerns about future growth. Meanwhile, the Bank of England is scheduled to meet next week, with no interest rate changes anticipated following a reduction in August. Attention is now shifting to the November 6 meeting, occurring just before the budget announcement, where another rate cut is widely expected as policymakers strive to balance sluggish economic activity, fiscal tightening, and their goals for reducing inflation.