U.K. Inflation Outlook Drops to Three-Month Low as Oil Tumbles
- Breakevens due in 10 years or less are attractive: SocGen
- Consumer-price growth has been near zero since January
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A gauge of the bond market’s outlook for U.K. consumer-price growth dropped to the lowest level since August as crude oil extended its decline into a sixth day, the longest losing streak in 18 months.
The five-year break-even rate, an indication of inflation expectations derived from the yield difference between U.K. government bonds and index-linked securities, fell for the fifth time in six days. While oil prices have plummeted, with Brent crude falling below $40 a barrel, there are some encouraging signs in the public’s perception of price growth.