Gilt Yield Curve Webinar
The Gilt Curve: Steeped in Steepness
In October 2025, we held a webinar focused on the latest trends and changes in the UK gilt yield curve. The session examined the implications of these developments for housing associations, particularly in relation to decisions around short-term versus long-term funding and effective liquidity management strategies.
The webinar was led by Sam Hill, Head of Market Insights at Lloyds Bank Corporate Markets, who provided expert analysis on the subject.
Key takeaways from the webinar include:
- Steep Yield Curve: The UK gilt yield curve is unusually steep, even after accounting for the typical relationship between policy rate expectations and curve slope. This steepness reflects unique dynamics, including sticky inflation and fiscal vulnerabilities.
- Inflation Expectations: Survey-based inflation expectations are higher than market-based metrics. If market-based measures align with survey expectations, the curve could steepen further due to increased inflation risk premiums.
- Fiscal Sustainability Concerns: The UK’s fiscal situation remains fragile, with ongoing questions about debt sustainability. These concerns necessitate an elevated term premium for long-dated gilts.
- Gilt Supply and Demand Dynamics: Elevated gilt supply and the shift to price-sensitive buyers (e.g., overseas investors and financial institutions) contribute to yield curve steepening. Adjustments in issuance maturity may counter this pressure, but only to a limited extent.
Please find the webinar recording and presentation below.
