UK 10-year bond yield drops below 4.5% for 1st time

Business Oct 17, 2025

The UK's 10-year government bond yield just dropped below 4.5%—the lowest since July—making it cheaper for the government to borrow money as it faces tough budget choices this November.

Lower borrowing costs could help ease pressure on public finances

Lower borrowing costs could help ease pressure on public finances.
With big deficits and slow economic growth, every bit of savings counts.

Why the drop in yield is significant

Global investors are snapping up safer assets like UK bonds thanks to US-China trade tensions and banking worries in the US.
Plus, Chancellor Rachel Reeves's hints at possible tax hikes and spending cuts during an IMF meeting have reassured markets, even though recent UK data shows rising unemployment and flat growth.