Markets are betting that the Bank of England will be forced to more than double interest rates by next May as it continues to battle with the highest levels of inflation seen in over 40 years.
Traders in the Overnight Index Swap market, which sets prices based on expectations of future official interest rates, are expecting rates to rise to 2.75% by the Bank of England's November meeting, before reaching 4% in summer 2023. Interest rates of 4% are more than one percentage point higher than what was expected earlier this month and more than doubles today's interest rate figure of 1.75%. The central bank is then expected to cut rates close to 3.8% by the end of next year, amid expectations of fading inflationary pressures and a long recession. The Bank of England raised ...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes