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UK Interest Rates Will Top 4% If Money Market Bets Prove True

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UK interest rates will hit 4% next year, the highest since the global financial crisis of 2008, according to wagers being made in money markets.

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UK interest rates will hit 4% next year, the highest since the global financial crisis of 2008, according to wagers being made in money markets. 

Traders are pricing in the Bank of England raising its benchmark rate by 235 basis points by May, according to interest-rate derivatives tied to central bank decision dates. That would be on top of the current rate, which is 1.75%.

With inflation at a four-decade high and expected to keep climbing, there’s a growing sense that the BOE will be forced to be more aggressive to bring price pressures under control. Citigroup Inc. has predicted that inflation is on track to rise above 18% next year because of soaring energy prices. 



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