Gilts selling off a wee bit, possibly in light of this report that Manchester MP Andrew Gwynne is stepping down - potentially making way for Andy Burnham.

Investment in housing and utilities could reduce government waste and boost growth if combined with the kind of collaborative, long-term planning that has served Manchester's economy, @andyburnham.bsky.social told @reuters.com "That is the way to reassure markets." www.reuters.com/world/uk/sta...

Starter pack of those who frequently comment and campaign on Social Security policy ... If you're interested in social security policy, follow these accounts and, as ever, let me know any good omissions ... go.bsky.app/S8a5jDX

UK GDP grew more than expected in November, boosted by JLR rebound - www.reuters.com/world/uk/uk-...

The world's central bankers side with Jay Powell, in a joint statement just released:

So... I've created a starter pack of UK government organisations currently on Bluesky: go.bsky.app/JHsY1Wz (Currently includes all those listed under ministerial and non-ministerial departments here www.gov.uk/government/o... - let me know any I've missed, or got wrong)

Reuters' live page on what's going on in Venezuela www.reuters.com/world/us/liv... and main story pulling threads together www.reuters.com/world/americ...

UK 10-year Gilts are Goldman Sachs' top cross-asset investment pick over the next six months Forecasts yields to drop 40bp and a total return of 6.1% VS return of 1.6% for Treasuries, 2.2% for the S&P500 Only sees gold as producing better returns over the next year

Lots of food for thought here on what might be improved at the ONS on processes, staff skills/pay etc. (Though note it's for if you were starting from scratch - implementing parts of this transition e.g. on staff numbers doesn't look easy.)

Stark results - though a bit unclear in the data what has triggered such a sharp downturn in orders (vague factors is site delays, fewer tender opportunities and clients unwilling to commit)

Minimum wage remit for 2026 now published. As expected, it's mostly a rollover of last year's policy. 1. Adult rate "not to fall below 2/3 median wages" i.e. in practice this means rise in line with forecast average earnings (will have a look at the likely rate later)

I've a graphics-focused piece on UK inflation trends out this morning ahead of Thursday's Bank of England decision - when the central bank looks set to cut interest rates to 4% from 4.25% despite inflation approaching double its 2% target. Brief summary to follow (or click now for the full story)

Next week the Bank of England will publish an annual assessment of its £100 billion a year QT programme. With gilt holdings down to £558 billion from £875 billion in 2022, markets expect QT to slow - and are increasingly looking for clarity on when it might stop. www.reuters.com/world/uk/ban...

UK firms lose taste for US investment, Deloitte survey shows www.reuters.com/world/uk/uk-...

What goes up goes down again. After rising 25 basis points yesterday - their biggest one-day rise since October 2022 - 30-year UK gilt yields have fallen 20 basis points this morning after Trump paused some tariffs last night.

30-year UK bond yields reached peaked at 5.649% today, their highest since May 1998. They're on track to rise 0.19 percentage points today - the sharpest jump since Truss's mini-budget. It's mostly a reaction to Trump, but also investor jitters about illiquid markets and the UK's high borrowing.

Not something you see evert day: 30-year UK government bond yields hit their highest since 1998 this morning, after an overnight selloff of US Treasuries

Unnerving moves in the gilt market today. This afternoon pricing quality of the 30-year gilt seems to have deteriorated (h/t @davidmilliken.bsky.social) LSEG data shows gaps, some lasting minutes (echoes of Sept 2022) Suggests worsening market functioning/bad liquidity.

A big change in Britain's bond issuance plans for the coming year: the lowest share of long-dated gilt issuance since 1990. Read more in my interview with the Jessica Pulay, head of the UK Debt Management Office www.reuters.com/world/uk/uk-...

Britain's disability benefits system leaves almost no one happy. It's expensive (by historic standards, if not internationally), gets few people back to work and appears to cause significant distress to many claimants. For more, read here: www.reuters.com/world/uk/uk-...

Today's UK CPI reading of 3% for January topped all forecasts in Reuters' poll (and the BoE's 2.8% forecast). But in many ways it was a mirror image of December's weaker-than-expected 2.5% reading. Air fares were a driving factor both times, adding 0.25pp in Dec and subtracting 0.14pp in Jan

Out overnight: Reuters' exclusive interview with Bank of England Chief Economist Huw Pill. Top line: he's cautious about further rate cuts (which isn't a no - but means a slowish pace) due to weaknesses in the supply side of the economy and it's ability to match demand. Other key lines here:

Some fairly dismal public sector productivity data out this morning from the ONS. Productivity in the health service was up just 0.2% qq in Q3 2024 - despite the end of strikes - and is still nearly 19% below where it was in Q4 2019.

Re-upping this piece of mine, which takes a look at how Britain finances (and refinances) £300 billion of government debt each year. The starting point is that Britain is an outlier. The average maturity of a UK government bond trading today is 14 years, versus 7 years for other rich countries. 1/n

Today’s Bank of England rate cut was less dovish than it looks at first glance. True, Catherine Mann wasn’t on anyone’s list as likely to vote for a 50 bp cut. But on the hawkish side - CPI to peak at 3.7% in Q3 and slowish to fall - there’s a camp on the MPC who are “cautious” about further cuts

Also coming up today: the Bank of England’s first decision of 2025 at 1200 GMT - rate cut to from 4.75% to 4.5% expected - risk of weaker near term growth forecasts but higher 2025 inflation than in November - medium term inflation outlook may be lower www.reuters.com/world/uk/ban...

How does last month’s UK gilt selloff (now reversed) affect UK bond issuance plans for 2025/26? To some investors, it strengthens the case for the UK to speed up its shift away from long-dated gilts, where Britain has issued double the global average. www.reuters.com/markets/rate...

Interesting detail in today's Bank of England data: foreign holdings of UK government bonds rose by a record £54 billion in Q4 2024. The previous peak rise was £48 billion in late 2020. Higher yields were likely a factor: the spread between UK and German 10-year yields hit its highest since 1990.

Pretty mixed picture - stagflationary even? - from today's jobs data. HMRC payrolls show biggest fall in employees since Nov 2020 and jobless rate ticked up to 4.4%, highest since May. But pay growth of 5.6% is also fastest since May (and fastest since 3 months to Feb for private sector).

Today's rather lacklustre UK GDP data, via Reuters' William Schomberg and @subanabdulla.bsky.social www.reuters.com/world/uk/uk-...

Bank of England's Taylor: with the economy weakening, it’s time to get interest rates back toward normal to sustain a soft landing

Big drop in UK gilt yields after today's lower than expected UK inflation. Two-year yields are on track for their biggest one-day fall since June 12 2024 (when some US inflation data came in below expectations).

UK markets have started the week much as they finished last week: 30-year gilt yields hit a new post-1998 high of 5.472% - up 6 basis points on the day - before falling back a bit. Sterling fell to its lowest since November 2023 at just below $1.21 and is down 3% since the start of the year.

Another choppy day on UK markets. Gilts slumped first thing this morning - pushing 30-year yields up to a new 26-year high of 5.442% - but have since recovered and are pretty much unchanged from yesterday's close.

The UK government bond sell-off has broadened today. 30-year gilt yields have hit a new 26-year high at 5.383% and 10-year yields rose to their highest since August 2008 at 4.821%. Sterling has fallen more than 1% against the dollar to its lowest since April 2024.

UK 30-year gilt yields have now hit their highest since August 1998 at 5.210%, pushing past a previous high of 5.209% set in October 2023 (according to LSEG data). Results of a 30-year gilt auction coming up - but in broad terms not good news for anyone wanting to finance long-term infrastructure.

Subdued economic start to 2025 / end of 2024 continues: 🏦 slowest consumer lending growth since June 2022 🛒 biggest annual fall in footfall at retailers since 2021 🏭 manufacturing PMI at 11-month low More detail here www.reuters.com/world/uk/uk-... and www.reuters.com/world/uk/uk-...

A v. interesting piece by Neal Hudson (@resi-analyst.bsky.social) in the FT highlighting a long-standing problem that house building data is so poor that we don't actually know how many new homes we are building & where. A major problem for government policy... #ukhousing www.ft.com/content/59c1...

Noteworthy revisions in today's ONS public finances release. 1. Borrowing for April-Oct in the current financial year revised up by £5.3 billion.

So where are we at as the dust settles after today's Bank of England decision? At first glance a 6-3 vote to hold rates vs market expectations of 8-1 looks mildly dovish. Sterling has weakened and markets see a shade more loosening this year (53 basis points vs c. 46 basis points) But...

Coming up at 1200 GMT: the Bank of England's last interest rate announcement of 2024. Economists polled by Reuters expect an 8-1 vote to keep rates at 4.75%. And markets now just see 1-2 rate cuts next year (though these expectations can change fast) www.reuters.com/world/uk/ban...

Nice primer on how the UK might navigate trade policy under Trump and balances ties with the EU and China from my @reuters.com colleague Alistair Smout (with input from @samuelmarclowe.bsky.social among others) www.reuters.com/world/uk/bri...

As good a point as any to let people know that Reuters now has an official Bluesky presence on @reuters.com. Follow for breaking global news and analysis!

Am pleased to be the third follower of bsky.app/profile/tera... who is now here. Tera is a fountain of fascinating charts. Make it worth her while putting them here ....

Bank of England Deputy Governor Dave Ramsden has set out his view on why inflation is at least as likely to undershoot BoE forecasts as match them over the next 2-3 years. Broadly, a soft labour market: - recruitment difficulties lowest since 2017 - vacancies/unemployment ratio lowest since 2019

This is worth reading on how how the Office for National Statistics might be undercounting the number of British workers by nearly 1 million...

UK CPI inflation came in higher than expected today at 2.3% for October, up from 1.7% in September. (The Bank of England and markets forecast 2.2%) That's a six-month high and the biggest rise in the annual rate since October 2022. Very much a story of higher energy prices as this ONS table shows:

Data out from the ONS today shows that last year the UK had the slowest rate of new business creation since 2010 - in theory not a great sign for future productivity. (Slight question in the back of my mind about how much this bounces around on changes to employee vs contractor incentives)

Nice paper from two Bank of England researchers having another go at estimating the impact of QT on gilt yields. It uses a model based on 400+ DMO gilt auction announcements from 2006-2023. www.bankofengland.co.uk/working-pape...

Lots to chew over in Rachel Reeves' and Andrew Bailey's Mansion House speeches. If I didn't know any better, I'd say they were each trying to wind the other up: Reeves telling Bailey to reverse post-crisis regulation and Bailey telling Reeves to rejoin the EU....