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Investors trim bets again on Bank of England rate cuts in 2025

BY Reuters | ECONOMIC | 12/19/24 02:42 AM EST

LONDON, Dec 19 (Reuters) - Investors reduced further their bets on how quickly the Bank of England will cut interest rates next year after the U.S. Federal Reserve signalled it would move slowly with reducing borrowing costs.

Interest rate futures on Thursday pointed to roughly 46 basis points of cuts to the BoE's benchmark Bank Rate by December 2025, down from about 50 basis points of cuts which were priced into the market on Wednesday.

The BoE is expected to keep borrowing costs on hold at 1200 GMT on Thursday after its December monetary policy meeting. It has said it will move gradually to lower rates because of inflation pressures in the economy, despite signs of a slowdown. (Writing by William Schomberg; editing by Sarah Young)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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