Economics
Pound Drop Pushes Bond-Market Inflation Outlook to One-Year High
- Break-even rate rises on ‘hard Brexit’ concerns, oil prices
- Inflation to climb ‘materially’ in coming months: UBS’s Wraith
Juckes: Pound's Fall All About Psychology at This Point
This article is for subscribers only.
The pound’s newfound weakness is fueling expectations of higher inflation in the U.K.
The 10-year break-even rate, a bond-market gauge of expectations for prices over the next decade, climbed to the highest since the middle of last year as sterling reached its weakest level since 1985. A lower exchange rate, spurred by concern Britain is heading for a so-called hard Brexit, raises the prospect of higher import costs, while the jump in oil over the past week is also boosting the inflation outlook.