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What were the drivers of UK long-term interest rates in 2025?
Long-term interest rates increased materially during the first three quarters of 2025, both in the UK and advanced economy peers. UK long-term rates then fell back during the fourth quarter, though remain close to their highest levels in over a decade. The primary driver of the increases in long rates was higher term premia, the compensation investors require for holding long-term bonds instead of a series of short-term bonds. […]