FX.co ★ UK 10-Year Gilt Bond Yield Hovers at 5-Week High

The yield on the UK 10-year gilt remained relatively stable at 4.72% on Thursday, marking its peak since April 11. This stabilization occurred as stronger-than-anticipated GDP figures subdued the likelihood of imminent interest rate reductions. In the first quarter, the UK economy experienced an expansion of 0.7%, the most rapid growth seen in a year. This led traders to reduce expectations for significant easing measures by the Bank of England. Nevertheless, some economists advised caution, emphasizing that much of the Q1 growth was driven by a spike in factory output in February, likely a result of efforts to accelerate exports to the US in anticipation of tariffs introduced by President Trump. Furthermore, labor market data released earlier in the week revealed an increase in the unemployment rate to 4.5% alongside a slowdown in wage growth, signaling possible challenges to household spending.