UK Gilt Yields Surge Following US Tariff Activation

The yields on UK government bonds, or gilts, experienced a significant rise on Wednesday, coinciding with the enforcement of US President Donald Trump's tariffs. The 30-year gilt yield reached its peak since 1998, marking a historic moment for investors and the UK economy.

Investor Optimism Fuelled by Trade Deal Prospects

British Chancellor Rachel Reeves highlighted the UK government's efforts to lower trade barriers and negotiate a trade agreement with the US. This announcement has injected a dose of optimism among investors, despite the immediate market reactions.

Market Reactions in Detail

At 9:25 am CET, the 30-year gilt yield saw an increase of 14.7 basis points, reaching 5.500%. Shortly after, at 9:27 am CET, the 10-year gilt yield rose by 7.6 basis points to 4.695%. Conversely, the two-year gilt yield decreased by 8.7 basis points to 3.874% at 9:28 am CET, showcasing a mixed response across different gilt maturities.