UK 10-Year Gilt Yield Update The UK 10-year gilt yield is showing a potentially interesting setup on the chart! A symmetrical triangle pattern appears to be forming, and a weekly close above 4.75% could confirm this formation, with a longer-term target up to 6.60%.
Recently, yields surged to 4.51%, the highest in a year, following reactions to the Labour government’s first budget. Key highlights include:
• 📈 £28 billion in increased borrowing per year across parliament.
• 💰 £297 billion in bond sales this fiscal year—second largest on record.
• 💸 £40 billion in new tax hikes, aimed at boosting funding for public services and covering a £22 billion fiscal gap.
The Office for Budget Responsibility adjusted GDP growth forecasts up to 1.1% for this year but revised down to 2% for 2025. Meanwhile, inflation is projected to average 2.5% in 2024, peaking at 2.6% in 2025, then easing to 2% by 2029.
The Bank of England is still expected to cut rates by 25bps this week, though traders now anticipate three quarter-point cuts by 2025's end (down from five last week).
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