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2025.12.3010:21:38UTC+00UK 10-Year Gilt Yield Falls to Over 3-Week Low

The yield on the UK 10-year gilt decreased to 4.48%, marking its lowest level in over three weeks, as the prospect of further monetary easing became less certain. In December, the Bank of England lowered its primary interest rate by 25 basis points to 3.75%, with the decision narrowly passing by a 5-4 vote due to ongoing concerns about inflation. Although headline inflation reduced to 3.2% in November, it still surpasses the Bank of England's 2% target. Consequently, Governor Andrew Bailey indicated that interest rates may continue to fall, though likely in a gradual manner. Meanwhile, UK GDP grew by 0.1% in the third quarter, meeting expectations, but the Bank of England anticipates stagnant growth in the fourth quarter. Market traders are still estimating at least one more rate reduction in the first half of the coming year.

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