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Economics

Traders Bet BOE Will Follow Fed With Five Rate Hikes This Year

  • Money markets see BOE’s key rate at 1.50% by December
  • Wagers come after U.K. two-year yields surged to a decade-high

Traders are wagering that the Bank of England will be right on the heels of the Federal Reserve when it comes to rate increases this year. 

Money markets now see the U.K. central bank lifting rates by 125 basis points this year, which would take its key rate to 1.50%. Bets remain for borrowing costs to rise in June to 1%, which could pave the way for the BOE to start selling gilts from its 895-billion-pound ($1.2 trillion) portfolio of bonds.