U.K. Rate Expectations Disconnect From U.S., European Peers

Markets expect U.K. interest-rates to rise further in the near term while the U.S. and the eurozone are likely near their peak rates, Rabobank senior macro strategist Stefan Koopman writes in a note. “Markets are currently pricing more than five 25 basis points rate hikes, versus two in the euro area and one in the U.S.,” he writes. The U.K.’s persistently high inflation could pressure the Bank of England to raise rates to “levels that were previously resisted,” Koopman adds. “We see rates reaching 5.25% this summer.”

…