Gilts/ Cash disconnect, why?
Whilst normally a lower Bank Rate would boost gilt prices, the experience of 2024/25 has been sharp divergence, with cash rates lower, bond yields higher.
Since August 2024 the Bank of England has cut Bank Rate at regular intervals, with commentators describing its thinking as a ‘quarter [point] per quarter’.
But the 7th August 2025 meeting the Monetary Policy Committee (MPC) was split and the decision to cut a further 0.25% only just crossed the line by 5/4. The impression was given that the MPC’s mood was shifting to neutral and becoming vocal on risk factors.