However, the 5Y, 12Y and 20Y fell by 24bps, 30bps and 21bps, respectively. At the longer end, the 30Y nominal yield only fell by 8bps.
CPI inflation remained elevated through the quarter, with February CPI at 10.4%. Despite the falls in utility and fuel prices inflation is expected to feel “sticky” for much of the year. Given resilient economic conditions, there is a possibility of bank rates rising further in the near term to 4.50% from the 4.25%.
Over the quarter, the nominal gilt yield curve shifted lower, falling by approximately 15 basis points (bps) at the short end and around 5bps at the long end.
Over the quarter, the nominal gilt curve has shifted up by around 50 basis points (0.50%) on average across all maturities.
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Over the quarter, the nominal gilt curve has shifted down by around 25 basis points across the medium to longer maturities.