UK gilt market under renewed stress
Key Questions
Why are UK gilts reaching 18-year highs around 4.7%?
Gilts are at ~4.7% due to energy shocks, CPI pressures, BoE hold, $100/bbl oil, fiscal strains, flat GDP, and the China energy project halt. February PSBR hit £14.3 billion. Reeves' plans and May local election volatility with Reform at 23% add stress.
What factors are stressing the UK gilt market?
Renewed stress comes from energy/CPI/BoE decisions, fiscal issues, China halt, and flat GDP. Civil service waste exacerbates pressures. Local elections with Reform at 23% increase volatility.
How does the UK economy factor into gilt market stress?
UK GDP is flat, increasing by only 0.1% in Q4 2025, amid fiscal deficits like £14.3bn PSBR. Government backs British tech rhetorically but lacks funding commitment. Energy and inflation risks heighten gilt yields.
Gilts ~4.7% 18yr highs from energy/CPI/BoE hold/$100/bbl/fiscal/GDP flat/China halt/benefits spend (Feb £14.3bn PSBR); Reeves plans; May locals vol Reform 23%/Greens surge; civil service waste; student loan cap adds fiscal pressure.