FX.co ★ UK 10-Year Gilt Yield Rises Amid Global Risk-Off Shift

The yield on the UK 10-year gilt has risen to 4.5%, mirroring an upward trend in global bond markets amid a risk-averse sentiment ahead of crucial US economic data that may shape monetary policy expectations. Market participants are also analyzing the implications of the UK's November budget. Chancellor Rachel Reeves has been defending against criticisms regarding claims of misrepresenting the public fiscal scenario, following the announcement of £26 billion in tax hikes last Wednesday. Prime Minister Keir Starmer emphasized that these "necessary choices" aim to prevent additional borrowing. In terms of monetary policy, the Bank of England is anticipated to lower interest rates by 25 basis points in December, after which it may hold rates steady due to fears of potential inflation resurgence. Conversely, in the US, markets are fully anticipating a third Federal Reserve rate cut in December, along with at least two more reductions expected by 2026.