The fallout from the UK’s unexpectedly high 8.7% CPI inflation rate in April continued yesterday (May 25th). Investors are now fully pricing in rate hikes at the Bank of England’s June, August and September meetings, with the curve peaking at 5.5% and falling only to 4.8% by end-2024. Two-year gilt yields rose by 18bps yesterday to 4.56%, their highest level since September’s mini-budget. Also, Nationwide was first off the block to announce increases in its fixed and tracker mortgage rates by up to 0.45 percentage points.
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