Fixed Income Weekly: UK Rates and Political Uncertainty

UK gilt yields hit 15-year highs as political uncertainty joins persistent inflation in driving rates higher. Meanwhile, global credit and EM markets remain resilient despite hawkish shifts from the Fed and ECB.

Key Takeaways

• 1.UK gilt yields have surged to 2008 levels (5.1% for 10-year) due to a combination of persistent inflation and a new UK-specific political risk premium.
• 2.Central bank rhetoric has shifted toward tightening; futures markets are now pricing in rate hikes for the Fed, ECB, and BoE through the end of 2026.
• 3.Credit markets remain resilient with positive total returns in both US and EUR segments, supported by tight spreads and strong corporate earnings.

Table of Contents

• Fixed Income Weekly
• The Chart of the Week
• What happened in the last ten days?
• Central banks
• Rates
• Credit
• Emerging market
• Our view on fixed income

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