UK Market Monitor Q2 2023

Yields on Nominal and Real Gilts substantially increased across all maturities over Q2 2023. Nominal rates increased by c130bps at 5Y maturity while at longer maturities increases were between 60 to 80bps.

Real yields increased similarly across the curve. Market derived inflation expectations remained at similar levels over the quarter across maturities. Actual inflation prints reduced modestly over the quarter, the 12 month CPI increase was 7.9% for the month of June this compared with 10%+ prints in each month of Q1.

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