Markets Calming Down After Getting Ahead of Themselves on Rates, BOE's Taylor Says

By Paul Hannon

Investors' expectations of Bank of England policy changes have moved into closer alignment with the likely path of interest rates, a member of the Monetary Policy Committee said Thursday.

In leaving its key interest rate unchanged last month, the BOE said it was prepared to raise borrowing costs to tame a pickup in inflation driven by the surging energy costs that accompanied the conflict in the Middle East.

Investors responded by shifting their expectations for future rate moves to as many as four increases this year. BOE Governor Andrew Bailey later said that markets were "getting ahead of themselves."

More recently, investors have shifted again to expect one or two rate rises.

"Markets might have gotten ahead of themselves and maybe things are calming down," rate-setter Alan Taylor said on the sidelines of the International Monetary Fund's Spring Meetings.

The BOE next announces a policy decision on April 30.

Write to Paul Hannon at [e-mail]

(END) Dow Jones Newswires

04-16-26 1230ET