FX.co ★ Gilt Yields in the UK Fall

The yield on the UK’s 10-year government bonds, commonly referred to as gilts, fell to 4.57%, marking its lowest point in roughly a month. This decline was prompted by President Trump's recent tariff announcement, which triggered widespread risk-averse behavior among investors and heightened concerns over its repercussions on the global economy. The United States plans to implement a 10% tariff on all imports, with substantially higher rates for select countries. UK imports will be subject to this 10% tariff. In reaction to these developments, traders have escalated their expectations for further interest rate cuts from the Bank of England. Current market pricing suggests approximately 62 basis points (bps) of reductions to the BoE's benchmark Bank Rate by December, an increase from around 54 bps observed on Wednesday. Additionally, the likelihood of a 25 bps rate cut at the Bank of England’s upcoming monetary policy meeting in May has risen to approximately 77%.