BOE Rate Bets Point to Growing Doubts of a Big November Hike
- Money markets wager on 74bps of BOE tightening next week
- Pound falls 0.4% versus the dollar; UK bonds edge higher
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UK traders are scaling down expectations for interest rates as the government charts a course for austerity to fix public finances.
Money markets are wagering on less than 75 basis points of hikes next week, according to interest-rate swaps tied to BOE policy dates, marking a sharp turnaround from a month ago when traders bet on as much as two percentage points of increases. The bank rate is expected to peak below 5% next year compared to over 6.25% last month.