UK gilts slip as Liz Truss says she will quit as prime minister

Posted on October 20, 2022Comments Off on UK gilts slip as Liz Truss says she will quit as prime minister

© Reuters. FILE PHOTO: Pound notes and coins are seen inside a cash register in a bar in Manchester, Britain September 6, 2017. REUTERS/Phil Noble

LONDON (Reuters) – British government bonds pared their gains on Thursday after Prime Minister Liz Truss announced she would resign and investors further scaled back their bets on an outsized 1% point interest rate hike next month by the Bank of England.

Twenty- and 30-year gilt yields, which had fallen as much as 13 basis points (bps) earlier in the day, were down 3-5 bps as Truss’s resignation opened the door to a week of uncertainty while her successor is chosen.

Rate futures markets pointed to an 8% chance of a 100 basis-point increase in Bank Rate on Nov. 3, after the BoE’s next meeting, down from around 25% at the start of the day. There is now a 92% chance of a 75 bps hike, according to Refinitiv calculations.

Source link

Comments Off on UK gilts slip as Liz Truss says she will quit as prime minister