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

The yield on the UK's 10-year gilt held steady at approximately 4.7%, nearing a ten-week high as anticipation builds for Finance Minister Rachel Reeves' forthcoming spring budget address. Recent data from a PMI survey highlighted a resurgence in business activity within the UK's extensive services sector, which could provide some solace to Reeves ahead of her crucial economic discourse. Nonetheless, the Office for Budget Responsibility is anticipated to lower the UK's growth forecast for the year. This, coupled with elevated borrowing costs, may compel Reeves to temper her proposed expenditure increases. Despite the looming global economic challenges, she has vowed to uphold fiscal rules, suggesting the possibility of public sector job reductions and additional budgetary savings. Concurrently, the Bank of England maintained interest rates last week, with market participants now assigning a 60% probability to a 25 basis point rate cut in May.