FX.co ★ UK 10-Year Gilt Yield Eases from 1-Month High

The yield on the UK 10-year gilt decreased to 4.51% from a recent peak of 4.54% on December 22, as market predictions regarding further monetary policy easing became more measured. The Bank of England reduced its main interest rate by 25 basis points to 3.75% in December, following a closely split 5-4 voting decision that underscored persistent concerns about inflation. Despite headline inflation falling to 3.2% in November, it remains above the central bank's 2% target, prompting Governor Andrew Bailey to indicate that interest rates might see further reductions, albeit at a slow and measured pace. Meanwhile, the UK's GDP grew by 0.1% in the third quarter, meeting forecasts, although the Bank of England anticipates stagnant growth for the fourth quarter. Market participants continue to expect at least one more rate cut within the first half of the coming year.