UK Bond Turmoil Aftermath Has Plenty to Keep Traders on Edge

The dust from the UK budget fiasco that almost broke the gilt market has barely settled. Yet, bond traders are gearing up for fresh volatility, with a rate hike, central bank bond sales and the government’s much-anticipated budget coming in quick succession.

First up is the Bank of England policy meeting Thursday, which will be key to establishing whether a collapse in rate-hike expectations has gone too far, or perhaps not far enough. It’s a complex calculation, with inflation at a 40-year high, a recession looming and a return to austerity in the cards under new Prime Minister Rishi Sunak.