Economics
BOE Rate-Hike Bets Pick Up Leaving Option Traders Wanting More
- Money markets can double rate hike expectations, says Robeco
- Option bets target 100 basis points of tightening by 2024
Outside the Bank of England in the City of London.
Photographer: Chris J. Ratcliffe/BloombergThis article is for subscribers only.
Unimaginable just six months ago, investors are piling in to bets that will pay out if the Bank of England raises interest rates for the first time since 2018.
The central bank sparked the game-changing moment earlier this month, after policy makers signaled optimism that the U.K.’s vaccine push would see growth rebound from the worst recession in more than 300 years. Officials further emphasized that sub-zero rates weren’t an imminent prospect, even as a report on their feasibility encouraged preparation for such a scenario.