Interest rate swaps showed 12 basis points (bps) of BoE rate cuts were priced in by May in late trade on Wednesday, implying a 50-50 chance of a quarter-point cut to borrowing costs by the Bank of England that month, down from an 80% chance on Tuesday.
For the end of 2024, just over 100 bps of BoE rate cuts are now priced in, compared with 122 bps on Tuesday, meaning the market expects four quarter-point rate cuts this year rather than five.
British government bond yields rose sharply with the 2-year yield leaping by more than 20 basis points - its biggest one-day jump since August last year - to its highest level since Dec. 15 at 4.389%.
(Reporting by William Schomberg; editing by Mark Heinrich)
