FX.co ★ UK Gilt Yields Rebound as BoE Cuts Rates Amid Split Vote

The yield on the UK 10-year gilt edged closer to 4.5% following the Bank of England's decision to reduce its Bank Rate by 25 basis points, bringing it down to 4.25%—the lowest point in two years. The vote was a tight 5–4 split. The slim majority agreed to the rate cut, citing ongoing progress towards reducing inflation, though they acknowledged that inflationary risks remain evenly poised. Among the four dissenting members, two advocated for a more significant cut of 50 basis points to bring the rate to 4%, while the other two believed the rate should remain at 4.5% due to the robust labor market. Additionally, the Bank highlighted the increasing uncertainty surrounding global trade policy, cautioning that recent tariff announcements have cast a shadow over the global growth outlook. However, the Bank evaluated that the direct impacts on UK inflation and growth would probably be limited. Concurrently, U.S. President Donald Trump referred to today as "a very big and exciting day" for both the U.S. and the UK, hinting at a possible trade agreement announcement later in the day.