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Traders Delay Bets for U.K. Rates Rising to 1% Amid Omicron Woes

  • BOE rate seen rising to 1% in 2023, from Dec. 2022 previously
  • Declines in pound, gilt yields lead major markets last week
Updated on

Traders are paring back bets on Bank of England rate hikes over the next year as concerns over fresh Covid restrictions outweigh inflation fears. 

Money markets are wagering the central bank’s key rate will rise to 1% by 2023 after Prime Minister Boris Johnson warned the U.K. is facing a “tidal wave” of omicron infections. Just over three weeks ago, traders saw borrowing costs hitting almost 1.25% by the end of next year.