The yield on UK 10-year government bond rose above 1.15% in October, hovering around its highest level since May 2019, as investors are worried about mounting price pressures in the global economy as well as expectations that major central banks might start tightening monetary policy soon. Bank of England official Michael Saunders said investors were right to bet on faster increases in borrowing costs, while Governor Andrew Bailey warned of a “very damaging” period of inflation unless policymakers take action. Headline inflation in the UK hit a nine-year peak and is expected to remain high of some time, amid a rally in oil prices and record cost increases for natural gas, coupled with supply chain disruptions related to Brexit and labor shortages. Elsewhere, the US Federal Reserve is likely to start reducing its massive bond-buying scheme in November.
Historically, the United Kingdom Government Bond 10Y reached an all time high of 16.09 in November of 1981. United Kingdom Government Bond 10Y - data, forecasts, historical chart - was last updated on October of 2021.
The United Kingdom Government Bond 10Y is expected to trade at 1.28 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.70 in 12 months time.