Inflation expectations have not materially changed versus the previous quarter, hence the higher yields are driven by higher real yields as opposed to higher inflation.
Inflation has continued to decrease in Q3 albeit still significantly higher than the Bank of England’s 2% target for CPI.
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.