Traders reduce bets on Bank of England rate hikes; UK government bonds' short end continues to rise

MaticHoleFiller · 2026-03-23T19:11:05+00:00

After Trump paused strikes on Iran's energy facilities, traders reduced expectations for Bank of England rate hikes, with UK 2-year gilt yields falling to 4.37%, marking the largest swing since March 2023.

MaticHoleFiller

2026-03-23 19:11:05

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After U.S. President Donald Trump announced a pause in strikes on Iran’s energy facilities, traders further reduced bets on the Federal Reserve raising interest rates, and UK government bonds continued their bullish steep rally.

The yield on 2-year UK government bonds fell by 19 basis points to 4.37%, with a trading range of up to 34 basis points during the day, the largest since March 2023; traders now expect a 57 basis point rate hike this year, down from the previous 105 basis points.

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Editor: Li Zhaofu

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