2026.06.2309:34:52UTC+00UK 10-Year Gilt Yield Falls for 2nd Session

The UK 10-year gilt yield fell to 4.78%, extending its decline for a second consecutive session and edging closer to the two-month low of 4.745% last seen on June 17. The move followed weaker-than-expected UK flash PMI data, which reinforced expectations of slowing economic momentum and further reduced the likelihood of additional Bank of England rate hikes.

Political risk also receded after Prime Minister Keir Starmer announced his resignation, with Andy Burnham emerging as the frontrunner to succeed him. Markets are now focused on Burnham’s potential policy platform, his likely cabinet appointments, and the resulting implications for fiscal policy and public finances. If no significant challenger enters the race, Burnham could assume office as early as July 17.

At the same time, the June PMI figures underlined lingering economic fragility. The composite index slipped to 49.4, below consensus forecasts and indicating a second consecutive month of contraction. Services activity softened notably, while the manufacturing sector showed relatively greater resilience. Rising input costs and persistent services-sector inflation remain key concerns for the Bank of England.