FX.co ★ UK 10-Year Gilt Yield Falls to Over 3-Week Low

The UK 10-year gilt yield fell to 4.652%, marking its lowest point in over three weeks, as investors exercised caution in anticipation of November's budget and mounting concerns regarding the country's debt outlook. Finance Minister Rachel Reeves faces the challenge of maintaining fiscal discipline while fostering growth, amid speculation of further tax increases following her previous £25 billion rise in employer social contributions. Analysts forecast only modest economic growth by the end of the year, with inflation expected to climb to 4%, double the target set by the Bank of England. Investors are closely monitoring upcoming employment, wage, and GDP data for insights into the direction of interest rates ahead of the Bank of England's meeting on November 6. Current market expectations suggest no change in interest rates, with the first rate cut anticipated in March. However, persistent inflation, particularly in the areas of wages and services, remains a significant concern. On the international front, global sentiment experienced slight improvement as President Trump eased his tariff threats toward Beijing, signaling the possibility of renewed trade negotiations.