FX.co ★ UK 10-Year Gilt Yield Falls Below 4.6%

The yield on the UK’s 10-year gilt fell below 4.6% on Thursday, coinciding with the upcoming Bank of England's interest rate announcement and recent jobs data release. Traders have slightly increased their anticipation of rate cuts this year, now factoring in a reduction of 53 basis points. No immediate rate adjustments are expected. The unemployment rate remains steady at 4.4%, while wage growth has decelerated slightly, with annual increases of 5.8% including bonuses and 5.9% excluding bonuses, both aligning with forecasts. As the Bank of England prepares to make its decision, it is anticipated to take a less dovish approach due to heightened concerns about Donald Trump’s trade policies and rising domestic inflation. Economists predict that the Bank will hold interest rates at 4.5%, maintaining a cautious perspective regarding future cuts. January's inflation rate reached 3%, exceeding the Bank's projections. Concurrently, the U.S. Federal Reserve has left rates unchanged but signaled the possibility of two cuts later in the year.