Last note ended on a conditional: if swaps hold at these levels, the next repricing queue to clear should be a downward one. They did not hold. GBP SONIA swaps have risen roughly eight to thirteen basis points across the curve over the past fortnight, on both of the sources we track and in the same direction on each. The five-year is back to around 4.3–4.4%, the two-year a little over 4.1%, and the long end has moved with them. That is the whole of the early-August decline given back, and it leaves the five-year within a handful of basis points of the peak it made in late July.
So the conditional lapses. The case for a downward reprice rested entirely on swaps staying where they were for long enough that lenders’ funding queues cleared at the lower level, and that window has closed without anything coming through it. Two weeks of relief turned out to be a pause in the July move rather than the start of a reversal — which is worth recording plainly, because we called it the other way, and the honest version of a rate note includes the calls that didn’t land.
Lender pricing, meanwhile, has done nothing at all. The five-year limited-company fixes we watch most closely are unchanged, holding pricing set a fortnight ago, and the broker-panel lists turned over only at the margins: a handful of new listings, one withdrawal, and nothing that improves on the best no-fee five-year already on the shelf. The cheapest no-fee five-year fix we can see is exactly where it was.
That combination — static products, a curve that has climbed back to its highs — is the same setup we described in late July, and it resolved then in the obvious direction. A lender holding two-week-old pricing against a funding cost that has risen underneath it is carrying a margin it did not intend to carry. That gets corrected, and the correction has only one plausible sign.
The practical reading for anyone mid-transaction has not changed, but it has hardened. An offer secured before July continues to look better than the shelf, and the residual case for switching products to shave a little off the cost of a fix is now best understood as a wasting asset: it exists today, it is small, and it disappears on the next upward move rather than growing. Where a transaction has a completion date in view, the value of certainty has gone up again this fortnight. We are holding, and we would want a materially better product — not a marginally better one — before disturbing paperwork that is already in motion.
One point from the last several notes survives the turn intact: a low headline rate attached to a percentage-based arrangement fee still tends to lose to a slightly higher rate with no fee, once the fee is carried and amortised over the fix. That arithmetic is indifferent to which way swaps moved this week. It stays worth doing before anyone is persuaded by a poster.