UK Bonds Tumble as Traders Rush to Bet on Higher Rates

UK bonds plunged, driving two-year yields to a 14-month high, as the Bank of England’s readiness to hike interest rates sent a shockwave through global markets.

Traders, responding to the central bank’s warning that it stands “ready to act” to tackle inflation, rushed to price in higher interest rates. Markets now imply at least two quarter-point increases by year-end — a massive U-turn compared with a month ago, when confidence was running high that central bank would cut rates today.