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I am hoping to understand 'Brexit' impact on UK yield curves. Specifically, government liability yield curves (so yields based on UK government bonds - Gilts):

The Background

On 24th of June - the day markets found out Britain is leaving the EU, rates for the whole term structure dropped. The curve also steepened, with a bigger drop at the short end. It seems that Monetary policy expectations are that the Bank of England might look past inflation (driven by depreciation of the pound / more expensive imports), and tackle economic growth by maintaining low interest rates.

If the markets are expecting the BoE to reduce their already low base rate, that might explain the drop in short term rates. The expectation of a prolonged period of economic uncertainty might explain why we see the drop at longer tenors also.

The Question

I've seen some publications on how the BoE constructs their curves (direction to a bulletin found in one of the attachments here). But without getting into the maths too much, wanted to get one thing clear:

Are yield curves published by central banks, solely a reflection of market expectations, based on fixed income prices in secondary markets? Or, does the government incorporate some of their own 'view' in published curves? A view perhaps reflecting the central banks ideas on future monetary policy?

As I understand it - curves, published by central banks are built from publicly available bond market information and do not include any form of forecast or estimate form the central bank. Is this correct?

Example of curves im talking about here

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Per @dm63, these yield curves are basically smoothed curves that best fit the prices/yields of bonds traded in the secondary market. However, they reflect much more than market expectations. Refer to Deriving Interest Rates for details.

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Yes, yield curves are a pictorial representation of the current secondary market yields of government securities (gilts, in the UK). These market yields are determined largely by expectations about what the central bank will do to short term rates over time.

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