BNP Paribas: UK bond yields expected to remain within a range in the first half of next year, likely to decrease in the second half.

The French bank in Paris pointed out in its 2026 global outlook report that the UK government bond yield may maintain range-bound fluctuations in the first half of 2026, and then decline in the second half of the year. Analysts stated that the recently announced UK budget confirmed that "moderate fiscal tightening will take place in the new fiscal year," and "we still expect the supply and demand situation in 2026 to improve." However, the bank also warned that the political tension before the May local elections may put pressure on UK government bond yields in the first half of the year. The French bank in Paris predicts that the yield on UK 10-year government bonds will reach 4.50% by the end of the second quarter, dropping to 4.30% by the end of 2026. According to Tradeweb data, the current yield is 4.491%.