UK Bonds Surge as Traders Bet on Two More BOE Rate Cuts in 2024
- Policymakers lowered their key rate for first time since 2020
- Sterling fell in recent days on increasing odds of a move
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UK bonds rallied sharply and investors braced for further interest-rate cuts from the Bank of England this year after it eased monetary policy for the first time since 2020.
The yield on 10-year UK government bonds fell as much as 11 basis points to 3.86%, while two-year rates slid 15 basis points, the largest drop this year. The Monetary Policy Committee voted 5-4 to lower the key rate to 5%, though gave no specific guidance on where interest rates may settle, nor the speed of cuts needed to get there.