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Central Banks

Traders See Lower Peak BOE Rate as Bailey Says ‘Nothing Decided’

  • Governor cautioned against assuming BOE will need to do more
  • Money markets trimmed bets on terminal rate in current cycle
Andrew Bailey

Andrew Bailey

Photographer: Chris Ratcliffe/Bloomberg
Updated on

UK government bonds rallied as investors honed in on comments from Bank of England Governor Andrew Bailey that cast doubt over the pace of further interest-rate rises. 

Short-end bonds led the advance, with the yield on two-year notes falling as much as 11 basis points to 3.57%. Money markets trimmed bets on the BOE’s terminal rate by some 10 basis points to imply around 77 basis points of additional hikes by the end of the year.