Interest rates expectations have jumped, but improved a little

Interest rates expectations have jumped, but improved a little

In this speed read article we look at where interest rates may end up

  • As widely reported, the Chancellor's mini-budget spooked markets and resulted in the value of the pound sliding and interest rate expectations jumping up.
  • Swap rates are often used as an early warning of where mortgage interest rates are heading. Immediately after the mini-budget, 5-year swap rates climbed to a high of 5.6% but have since improved a little to 5.2%.
  • The next few weeks leading up to the Bank of England's next meeting and the Chancellor's budget are likely to be volatile for interest rate expectations.
  • Interest rates are definitely rising but with current volatility the extent they will need to rise is still unclear.
  • Source: Dataloft, UK investing.com


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