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Money markets raise bets for UK rate hikes

by Mike Robinson

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© Reuters. FILE PHOTO – Wads full of British Pound Sterling banknotes are displayed in stacks at Money Service Austria’s Vienna headquarters, Austria on November 16, 2017. REUTERS/Leonhard Foeger/File Photo

LONDON, (Reuters) – Money markets increased their bets on a November increase in interest rates as soon as next month following a steady rise of yields over the past week. Additionally, hawkish remarks from policymakers and a persistent increase in yields over the last week raised hopes for Britain’s first post-pandemic rate hike.

CME’s interest rate futures market showed that there was a 22% chance of an increase in the rate of November, as opposed to 12%. However, December futures show a 45% probability.

According to the Telegraph newspaper, Michael Saunders (Bank of England Policymaker) advised British households that they should be prepared for “significantly earlier interest rate rises” as inflation pressures the British economy.

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