The UK 10-year gilt yield inched up to 4.43% after an 8bps drop below 4.4% in the prior session, which was its lowest since December 2024, as investor focus turned to signs of economic weakness ahead of the Autumn Budget. Softer labor market data strengthened bets on a Bank of England rate cut next month, with markets now assigning roughly an 80% chance of a move. Regular pay growth slowed to 4.6% in Q3, the weakest since early 2022, while total pay, including bonuses, rose 4.8%, slightly below forecasts. Unemployment climbed to 5%, a four-year high, as joblessness rose and employment declined for the first time since early 2024. The BoE held rates steady last week but signaled a possible December cut if domestic inflation pressures ease. Investors await Q3 GDP data on Thursday for more clues on the economic outlook before the government’s budget announcement later this month.
