UK Gilts Yields Rise, GBP Higher, FTSE Lower

Yields on U.K. government bonds have rallied across the curve as the Bank of England adopts a more “hawkish” tone.

The majority of Monetary Policy Committee members think “some withdrawal of monetary stimulus is likely to be appropriate over the coming months.”

Also supporting yields is the BoE now expects inflation to rise above +3% in October.

Two-year gilt yields have rallied to +0.32%, their highest level since July and sharply up since levels of +0.13% only last week. Five, 10 and 30-year yields are also backing up.

The FTSE 100 is trading down -0.36% as GBP/USD trades up +0.8% at £1.3320 and EUR/GBP is down -0.82% at €0.8926.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell