Barclays Says U.K. Breakeven Rates, at 5-Month High, May Widen on CPI Data

U.K. breakeven rates, which provide a gauge of inflation expectations, may rise should a report today show consumer price increases outpaced analysts’ estimates, according to Barclays Plc.

The 10-year breakeven rate, derived from the difference in yield between nominal and index-linked bonds, closed at more than 3 percentage points yesterday for the first time since June 4. A report from the Office for National Statistics today may show consumer prices rose 3.1 percent from a year earlier, the same pace as in September, the median forecast of 28 economists in a Bloomberg News survey shows.

Breakevens “may have room to widen further on any upside surprise,” a team of Barclays analysts including Alan James, Khrishnamoorthy Sooben andHenry Skeoch in London wrote in an investor report dated yesterday.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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