UK inflation higher than expected, markets reduce BoE rate cut pricing

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Blockbeats
2 days ago
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On November 20, following higher-than-expected UK inflation data, UK government bond yields rose as the market expected fewer rate cuts. The UK's overall annual inflation rate in October rose from 1.7% in September to 2.3%, higher than the 2.2% unanimously expected by economists surveyed by The Wall Street Journal. Moneyfarm's Chief Investment Officer Richard Flax said in a report: "As policymakers remain cautious, this rise in inflation reduces the likelihood of a rate cut in December." According to data from the London Stock Exchange Group, the market expects a 16% probability of a Bank of England rate cut in December. Data from the trading platform Tradeweb shows that the yield on 10-year UK government bonds rose 5 basis points to 4.485%, and the yield on 2-year UK government bonds rose 4 basis points to 4.451%.

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