30-Year Gilt Yield Tops 6% Ahead of Fed Minutes

Week of 5 October 2026

Bond markets were in charge again this week. The UK 30-year gilt yield broke above 6% for the first time since 1998 and the US 10-year Treasury yield hit a fresh post-2007 high, dragging the FTSE 100 to a three-month low and sterling with it. Softer US PCE inflation trimmed bets on an October Fed hike, and Friday's jobs report all but killed them off, with just 29,000 jobs added in September.

Minutes from the Fed's September meeting land on Wednesday, with the US services ISM on Monday. In the UK, Shell updates on Wednesday ahead of Tesco's half-year results on Thursday.

Week in Review

Gilts broke a 28-year barrier.

The UK 30-year gilt yield topped 6% on Thursday for the first time since 1998, while the 10-year gilt yield briefly climbed above 5.5%, its highest since 2007, before easing back towards 5.33% on Friday. Hike dissenter Catherine Mann added fuel, saying "our current policy stance is not sufficiently tight, which is why I voted to increase Bank Rate at the past two meetings", and warning that investors are demanding greater compensation for UK risk.

The sell-off is also squeezing Chancellor John Healey ahead of his 28 October Budget. Analysts estimate higher borrowing costs have roughly halved his fiscal headroom, making tax rises more likely.

UK data was mixed. Second-quarter GDP was revised up to 0.5%, but Nationwide house price growth slowed to 0.8%, a nine-month low.

Treasuries hit fresh highs before PCE cooled things.

The US 10-year Treasury yield touched 5.34% on Thursday and the 30-year Treasury yield reached 5.60%, its highest since 2002. Wednesday's PCE data offered some relief, with headline inflation slowing to 3.4% and core to 3.0%, both well below forecasts.

Payrolls all but ruled out an October hike.

The US economy added just 29,000 jobs in September, well short of the 90,000 forecast, and July and August were revised down by a combined 60,000. Unemployment rose to 4.2% and wage growth slowed to 0.1% on the month. Futures now price around a 17% chance of an October hike, down from 70% a week ago, with December now the favoured meeting. The 2-year Treasury yield dipped to 4.70% and the US Dollar Index slipped back below 102, while Wall Street opened higher.

UK stocks took the hardest hit.

The FTSE 100 fell around 2% on the week, with Thursday's 1.7% drop its steepest since May. Banks and housebuilders led the sell-off on rate fears, with NatWest down 5.4% and Taylor Wimpey 5.5% on Thursday alone. IG Group plunged more than 20% on Friday after cutting its revenue outlook on weaker trading activity, dragging CMC Markets and Plus500 down over 7%. Greggs jumped 6% on Wednesday after nudging up its profit outlook, and Wetherspoon rose 6% on Friday as revenue beat forecasts.

Wall Street held up better.

The S&P 500 slipped around 1% and the Dow almost 2% through Thursday, while the Nasdaq 100 was steadier after Micron beat forecasts and raised its guidance. Nike fell nearly 4% after hours on Thursday to a 13-year low. Earnings of $0.48 per share beat forecasts, but revenue of $11.2 billion fell short, and the company warned sales would fall by a high-single-digit percentage this fiscal year while announcing job cuts.

The dollar climbed and sterling slid.

The US Dollar Index rose above 102 on Thursday and GBP/USD fell to a three-month low near 1.318. EUR/USD held around 1.125 despite eurozone inflation jumping to 3.8% on Friday, above the 3.6% forecast.

Biggest Market Movers

l  UK100 – fell around 2% to a three-month low

l  GBPUSD – hit a three-month low

l  USDX – climbed above 102

l  UKOIL – swung between $95 and $104

l  XAUUSD – dropped 4% on Monday

l  US30 – fell almost 2%

l  BTCUSD – gained over 2%

l  IG Group (IGG) – plunged more than 20%

l  NatWest (NWG) – fell 5% on Thursday

l  Greggs (GRG) – jumped 6%

l  Nike (NKE) – hit a 13-year low

Top Events in the Week Ahead

With payrolls out of the way, attention turns to how far the Fed is prepared to go, a run of big UK corporate updates and whether the Bank of England's hawks keep pushing for a November hike.

Fed Minutes and US Data

The minutes will show how hawkish the Fed really is.

Wednesday's minutes from September's meeting, where the Fed raised rates for the first time in over three years, should reveal how many officials back a follow-up hike. Monday's ISM services PMI is forecast at 55.7, and Friday brings the University of Michigan's preliminary October sentiment survey. After Friday's weak jobs report, markets will look for signs the committee is prepared to wait until December.

Tesco Half-Year Results

Tesco reports on Thursday after three years of market share gains.

The UK's biggest supermarket is guiding to full-year adjusted operating profit of £3.0 billion to £3.3 billion. Investors want to see UK like-for-like sales build on first-quarter growth of 1.8%, and an explanation for the 3.2% drop at wholesale arm Booker.

Shell Trading Update

Shell gives the first read on a volatile quarter for oil.

Wednesday's third-quarter update note will show how oil prices hovering around $100 have fed through to trading and refining margins, ahead of full results later in the month.

Bank of England Speakers

The MPC's hawks are back on the circuit.

Catherine Mann speaks on Tuesday, and Deputy Governor Clare Lombardelli, who recently warned policy may need to tighten if energy prices stay high, speaks on Thursday. With the 30-year gilt yield above 6%, Wednesday's conventional gilt tender will also get more attention than usual.

Other Events and Earnings

In the UK, Monday brings the final services PMI, forecast at 51.7, and September car registrations, followed by the construction PMI on Tuesday, Halifax house prices on Wednesday and the RICS housing survey on Thursday.

Elsewhere, Germany publishes factory orders on Tuesday and industrial production on Wednesday, and the ECB's accounts of its last meeting on Thursday will get extra scrutiny after eurozone inflation jumped to 3.8%. Canada's jobs report lands on Friday.

On earnings, Thursday is the busiest day in the UK, with Tesco half-year results alongside Volution full-year results, Next 15 half-year numbers and trading statements from Unite Group and Hostelworld. Shell's update comes on Wednesday. In the US, PepsiCo reports on Thursday and Delta Air Lines on Friday, with jet fuel costs in focus.