The 10Y gilt yield hit new highs on the back of inflation and political risks, but investors should not ignore the role of the Bank of England’s QT in this. We estimate the 2s10s GBP curve steepened by 60bp more than the USD curve due to the increased gilt supply and the divergence can continue. This could also be a lesson for Warsh, who may look to walk a similar path. Global Factors Add to GBP Term Premium, but Not Entire Story. The 10Y gilt yield has hit its highest level since 2008, and whilst the near-term focus remains on oil prices and politics, the Bank of England’s balance sheet unwind poses further upside risk [...]