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2025-12-15 17:05:09
[Rate Cut Expectations Rise, UK Bonds React; Key Data to Determine the Outcome] ⑴ Strong market expectations for a Bank of England rate cut this Thursday are dominating the movement of UK government bonds, with the 10-year bond yield falling 2.5 basis points to 4.493%. ⑵ Institutional data shows that the UK money market is pricing in an 85% probability of a rate cut this week and expects at least one more rate cut next year. ⑶ However, persistently high inflation means that the Monetary Policy Committee's vote may be divided, and market expectations are not monolithic. ⑷ Citigroup analysts point out that the market has fully priced in a rate cut, but Tuesday's employment data and Wednesday's inflation data could still introduce last-minute uncertainties and affect the degree of disagreement within the committee. ⑸ Therefore, before the central bank's decision on Thursday, the employment and inflation data released this week will be key risk factors determining whether market expectations are realized and even the subsequent direction of the bond market.
