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U.K. Bonds Slump After BOE Stuns Market by Raising Rates

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Bank of England Raises Benchmark Interest Rate to 0.25%

Investors scrambled to sell U.K. government bonds and priced in a more aggressive tightening cycle after the Bank of England unexpectedly raised interest rates for the first time in three years.

The yield on 30-year benchmark bonds jumped 10 basis points on Thursday to 1%, the highest level since November. The BOE raised its key rate to 0.25%, setting aside concerns over a surge in coronavirus infections that have clouded the economic outlook.