UK 10-year gilt yields held near 5.23%, hovering close to their lowest level since September 8, as the latest pullback in oil prices lent support to broader markets. Brent crude traded below $100 a barrel following reports that Saudi Arabia was preparing to restart a key pipeline and that the US had made progress in negotiations with Iran, despite President Trump’s earlier threat against Tehran at the UN General Assembly.
The retreat in oil, however, did little to alter expectations for further Bank of England tightening, with markets still assigning a strong probability to a 25bp rate increase in November.
Preliminary September PMI figures continued to signal expansion in UK business activity, though growth slowed modestly and fell short of forecasts. Services providers pointed to soft domestic demand and persistent geopolitical uncertainty as key drags, while manufacturing was underpinned by investment in AI and increased defense spending.
In the US, hawkish remarks from Federal Reserve officials reinforced expectations of additional interest rate hikes.
