The UK 10-year gilt yield slipped to 4.43% after the Bank of England left interest rates unchanged but signaled that policy easing may be on the horizon. Policymakers voted 5–4 to maintain the Bank Rate at 4%, noting that inflation has likely peaked. The close split, with four members backing a 25 bps cut to 3.75%, was more dovish than markets expected and pointed to growing momentum toward rate reductions. The BoE said the risk of persistent inflation has eased, while downside risks from weaker demand have become more pronounced, leaving the outlook more balanced. Officials added that if disinflation continues, rates are likely to move gradually lower, though they stressed the need for further evidence before beginning a sustained easing cycle.
