UK Market Monitor Q4 2025

Over the quarter, the nominal gilt curve has shifted down by around 25 basis points across the medium to longer maturities.

The real yields curve has also moved in the same direction, albeit by around 20 basis points.

Reported inflation has fallen over the quarter with year-on-year CPI falling from 3.8% in September to 3.4% in December and RPI falling from 4.5% in September to 4.2% in December. With lower inflation expected, the BoE reduced rates by 25bps to 3.75% in December, and the market expects two further 25 basis point cuts in 2026.

Credit spreads (versus swaps) fell over the quarter, although there was some volatility mid November. AA-rated spreads closed 2025 just below 100 basis points, A-rated slightly below 130, and BBB-rated just above 160 basis points.

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UK Market Monitor Q3 2025

A broadly parallel upward shift of approximately 20 basis points is evident across the nominal gilts curve, with yields reaching multi-year highs.

UK Market Monitor Q2 2025

The short-term nominal curve shows a decrease in yields for tenors under 20 years, while remaining relatively flat at the longer end of the curve.

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