UK 30-year gilt yields drop in pre-market trading as BoE pauses long-dated sales
The Bank of England halts long-dated gilt auctions until April 2027, and the 30-year yield falls in early trading toward its steepest one-day drop since May.
Published
The UK's 30-year gilt yield fell 10 basis points to 5.76% in pre-market trading on Thursday, putting it on course for its biggest one-day drop since May, after the Bank of England said it would pause sales of long-dated gilts until April 2027.
The pause interrupts a quantitative tightening programme that has already committed the Bank to £20 billion in annual gilt sales, a small fraction of the £368 billion total reduction planned through 2034. The Bank held interest rates at 3.75% this week and forecast inflation slightly above 4% in early 2027, a backdrop that has pushed two and ten-year gilt yields to their highest levels in more than a year. Traders are now pricing four rate hikes by the end of 2027, up from bets of just 38 basis points of tightening priced earlier this year, as households also face a 25% rise in energy bills.
The drop at the long end of the curve reflects a tactical shift in how the Bank manages its balance sheet rather than any change in the direction of monetary policy. With the central bank pausing auctions and potentially shifting sales toward the government rather than the open market, long-dated yields are finding some relief, but that does not alter the hawkish rate expectations traders have priced in, nor the upside inflation risks the Bank has flagged. For now, the move looks largely neutral for the broader outlook.