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UK Bonds Plunge as Traders Bet BOE Rates Will Hit 3% This Year

  • Nation’s debt leads global selloff in week of policy decisions
  • Market pricing implies a series of 50 basis-point hikes
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BOE Hikes Tempered by Growth Challlenges: CIBC's Stretch
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UK government bonds plunged and the pound rebounded as traders bet the Bank of England will keep hiking interest rates to 3% this year.

Two-year bond yields, the most sensitive to monetary policy, rose as much as 33 basis points, putting them on track at one point for their biggest jump since 2009. That came after BOE officials signaled they’re prepared to unleash larger hikes if needed to tame inflation, following a 25 basis-point rate rise to 1.25% that initially underwhelmed markets.