The 30-year gilt broke 6%: how London lost 233 points this week

The yield on the 30-year gilt broke above 6% on Thursday for the first time since 1998, and the FTSE 100 fell 1.68% to 10,428.27 — its worst single day since May. Friday's 0.32% recovery to 10,461.95 did not undo it. London finished the week 233 points, or 2.18%, below the 10,695.25 it carried into Monday.

That is the week in a line, and it is worth saying what it is not. Our Monday note told readers the pair to watch was gilts and sterling, with Chancellor John Healey speaking at Labour's conference in Liverpool and the 28 October Budget five weeks out. The gilt market duly delivered the week's defining move. But it was not Healey who delivered it, and it was not Prime Minister Andy Burnham's triple-lock signal on Tuesday either. Both political catalysts we flagged came and went with less effect on the curve than the US Treasury market had in a single overnight session.

The other half of the story ran the opposite way all week. Brent crude opened Monday above $106 a barrel after President Trump rejected Iran's offer to reopen the Strait of Hormuz; by Friday it sat near $96.75. On most weeks a 9% fall in the oil price is the headline in London. This week it was not loud enough to be heard over the bond market.

How the week unfolded

We logged the sentiment as Cautious for three sessions, Risk-off on Thursday, and Cautious again on Friday. The sequence is accurate but it flatters the week's balance: four of the five notes opened on the gilt market, and the one that did not still ended there.

Monday was a holding pattern. Ten-year gilt yields were near 19-year highs around 5.35%, and the figure that framed the whole week came from Bloomberg Economics — that the sell-off had already consumed roughly £12bn of the Treasury's £23.6bn fiscal headroom before a single Budget measure had been announced. Oil above $106 lifted the energy majors and kept the commodity-heavy index better supported than its European peers.

Tuesday brought the first corporate test and one piece of genuinely good news: BRC-Nielsen shop price inflation eased to 1.4% in September from 1.5%, with food inflation down to 2.5% from 2.8%. The index still closed 0.5% lower at 10,636.71, its weakest since 15 September, because US Treasury yields had hit a 24-year high overnight.

Wednesday was the week's one firm open, the FTSE 100 up as much as 0.7% before fading to close at 10,606 — down 0.29% on the day and roughly flat across the entire third quarter. Two things we had flagged landed, and neither registered. The Bank of England's Alan Taylor said the case for a further rate rise was “not compelling” unless high energy prices fed through into broader inflation. And the final reading of Q2 GDP, which our Monday note had pencilled in for Friday, in fact arrived on Wednesday: revised up to 0.5% from the initial 0.4% estimate, leaving Britain the fastest-growing G7 economy over the first half of 2026. Closer to the mood was the Lloyds Business Barometer, with confidence down 12 points to 41%, the weakest reading since April 2025.

Thursday is where it broke. Ten-year US Treasury yields pushed to 5.31%, their highest since 2007, despite softer US inflation data the day before, and the gilt curve followed hard — the 30-year through 6%, the FTSE 100 down 1.68%, the FTSE 250 off 1.62% to 24,143.21. It was the only session of the week London underperformed Europe outright.

Friday brought the relief our morning note had described as tentative. The 10-year gilt eased back to 5.332%, the FTSE 100 added 33.68 points to 10,461.95 and the FTSE 250 rose 0.34% to 24,226.10, helped by a US payrolls report far weaker than anyone had modelled: 29,000 jobs added in September against a consensus near 90,000, August revised down to 133,000 and unemployment up to 4.2%. Our note had flagged the print as the next test for gilt yields and put the forecast at 89,000. Yields fell, so on the narrow question the week ended better than Thursday implied — but it took a badly missed jobs number to get there.

The names that moved it

Greggs was the week's clearest winner, up 7.1% to 2,007.9p on Wednesday after a third-quarter update beat expectations. Like-for-like sales at company-managed shops rose 3.4% in the 13 weeks to 26 September, against 2.1% in the first half, and the bakery chain now expects a “modestly improved” outcome for the year having previously guided to pre-tax profit similar to last year's £172m. The upgrade came with a restructuring: four manufacturing sites to close over two and a half years, around 740 jobs at risk, roughly £60m of cash cost in exchange for about £20m of annual savings. Our Greggs page carries the detail.

JD Wetherspoon managed the harder trick on Friday, rising 8% on results that showed pre-tax profit before one-off items down 28% to £58.6m. Revenue rose 5.2% to £2.24bn and like-for-like sales 4.2%; the squeeze came from energy, repair and wage costs. Investors looked past it to stronger recent trading and management's confidence in meeting full-year forecasts, and the dividend was held at 12p. The Wetherspoon reaction tells you something about the week: a 28% profit fall was rewarded, while an index-level move in yields was punished.

The punishment landed on the rate-sensitive end of the market. On Thursday NatWest fell 5.4%, Lloyds 4.5% and Barclays around 4.1%, with housebuilders including Taylor Wimpey, down 5.5%, hit on the prospect of mortgage rates staying elevated. BP and Shell were among the early risers twice in the week, on Monday and Wednesday, as crude held above $100 — and both lost that support as Brent slid into the $96 handle.

Among the smaller results, Close Brothers narrowed its full-year pre-tax loss to £63.4m from £77.9m but booked a further £164.7m motor-finance provision, taking its total charge to roughly £320m, scrapped the dividend and reported a 14.1% CET1 ratio. A.G. Barr lifted first-half revenue 8.5% and adjusted pre-tax profit 2.6% to £36.1m despite £10m of supply disruption, raising the interim dividend to 3.82p. Topps Tiles guided to full-year adjusted pre-tax profit of about £6.6m, in line, with its Pro Tiler Tools trade arm the standout at revenue up 18.2% to a record £42m. Primary Health Properties reported nine-month rental growth marginally ahead of guidance. The pattern across all four is the same one the screener has been showing for weeks: cost control is doing more work than demand.

What to watch next week

The fixed date everything in this week pointed at is the Budget on 28 October, and gilts have now spent four consecutive sessions trading as though the arithmetic has already got harder. The monthly S&P Global/CIPS survey round completes in the opening days of October, with the services and composite readings following the manufacturing print that opened this week and the construction print that closed it. Third-quarter trading updates begin arriving through October across the FTSE 350.