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2025-12-18 20:23:33
[Market Interpretation of "Not Dovish Enough": UK Bond Yields Rise Instead of Falling, Divergent Voting Reveals Hidden Meaning] ⑴ After the Bank of England voted by a narrow 5-4 majority to cut interest rates by 25 basis points to 3.75%, UK government bond yields rose instead of falling. ⑵ Data shows that the yield on 10-year UK government bonds climbed 4 basis points to 4.494% after the rate decision was announced, compared to 4.449% before the decision. ⑶ This market reaction indicates that although the central bank implemented a rate cut, the intense internal divisions and cautious signals regarding future policy paths were interpreted by traders as "not dovish enough." ⑷ Previously, some analysts had expected that after Wednesday's lower-than-expected UK inflation data, six or more members of the Monetary Policy Committee might support a rate cut. ⑸ The discrepancy between the actual voting results and some market expectations, coupled with the central bank's wording that future rate cuts would be "more difficult to weigh," triggered a sell-off in the bond market, highlighting market doubts about the strength and speed of the central bank's subsequent easing measures.
