FX.co ★ UK 10-Year Gilt Yield Falls to Lowest Since 2024

The yield on the UK 10-year gilt fell to 4.25%, its lowest level since December 2024, as investors responded to the outcome of a key district election and its implications for Prime Minister Keir Starmer. The governing Labour Party lost the Gorton and Denton seat near Manchester—previously a stronghold in the 2024 general election—to the Green Party, with Labour pushed into third place behind Reform UK. The setback has heightened uncertainty over the positions of Starmer and Chancellor Rachel Reeves, amid concerns they could be replaced by ministers favouring higher fiscal spending, which could place additional pressure on the UK’s public finances. Economic sentiment also deteriorated, with the UK GfK Consumer Confidence Index unexpectedly declining in February, partly reflecting rising unemployment. At the same time, stronger-than-expected fiscal data, a dovish Bank of England stance, softer labour market readings, and subdued inflation have helped calm market concerns.