LONDON, March 8 (Reuters) - British investors on
Wednesday fully priced in a 0.25 percentage point increase in
Bank of England interest rates at its March meeting, after the
U.S. Federal Reserve signalled that it could push its rates
higher.
A day earlier, the overnight index swap market had shown a
roughly 90% chance that the BoE would raise rates on March 23 to
4.25% from 4%, and a small chance of a pause - based on
calculations by Refinitiv.
Instead, investors now see a roughly 5% chance of a bigger
0.50 percentage point hike on March 23.
The re-pricing follows Fed Chair Jerome Powell's comment
overnight that the United States may need to raise interest
rates more than expected in response to recent strong data. The
dollar surged against the pound after Powell's remarks.
The yield on the interest rate-sensitive 0.625% 2025 British
government bond - which became the benchmark two-year gilt at
the start of the month - rose to its highest level since Oct.
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UK now investors fully price in BoE March rate hike ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Andy Bruce; editing by Barbara Lewis)
Messaging: @brucereuters))
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