UK 10-year gilt yields inched up to 4.76%, remaining close to two-month lows, as investors assessed fresh labour market data ahead of the Bank of England’s policy decision and the Makerfield by-election, which could influence Labour’s future economic agenda.
Unemployment fell to 4.9% in the three months to April, beating expectations of 5.0%, while average earnings grew by 4.4%, outpacing the 4.0% forecast. In the private sector, pay growth aligned with estimates at 2.9%, down slightly from 3.0%, a development that may ease BoE concerns about wage-driven inflationary pressures.
The Bank of England is widely expected to leave interest rates unchanged today, though any dissent on the Monetary Policy Committee could signal a more hawkish tilt. The announcement follows the US Federal Reserve’s decision to hold rates steady, even as nine of its 19 policymakers now anticipate at least one rate increase later this year.
