Traders Bet on 5% BOE Peak Rate as Inflation Fears Resurface
- Consumer-price index stays above 10%, driven by food costs
- Rate wagers lead to bond selloff, provide support for pound
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Traders ramped up bets on further interest-rate hikes from the Bank of England after UK inflation unexpectedly remained in double digits, a wake-up call for investors who thought the tightening cycle was close to over.
Data showed consumer prices rose 10.1% in March from a year earlier, driven by the biggest increase in food costs in more than four decades. That follows strong wage growth reported Tuesday, adding to concerns that UK inflation is proving stickier than anticipated.