- Following the BOEs decision to hold rates at 4%, the market has experienced a sell off across the term structure – majority of which residing in the long end of the curve.
- 1y – rose 1.2bps to 3.924%
10y – rose 3.9bps to 4.664%
30y – rose 5.9bps to 5.489% - Market participants are demanding greater yield amid concerns around upside inflation risk fuelled by energy and food bills. Household inflation expectations are now rising and some officials worry this could trigger a feedback look by fuelling wage demands that then lead to more price increases.
- Investors do not expect any more easing from the BOE this year, only fully pricing in one more quarter point reduction by the end of 2026.
- More to follow as this develops.
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