UK economy shrinks more than expected, UK Treasury

Aihuicha, December 13: the latest economic data released by the UK will consolidate the recent rise in UK Treasury bonds and encourage interest rate traders to include the expectation that the Bank of England will cut interest rates sooner or later in pricing. Britain's GDP shrank by 0.3% in October. The Bank of England had previously predicted economic weakness. Although the data cover only one month, the real question is how long and how severe the downturn will last. But seasonal purchases and consumption at the end of the year could give the fourth quarter economic data a decent veneer. With overall, core and services inflation still hovering above the 2% target, the Bank of England currently has little room to adapt to economic weakness. Given its dilemma, it may decide to wait for full quarter data to understand the performance of the real economy before considering whether to ease policy. But Treasury investors are unlikely to wait. The two-year yield has failed to fall below 4.50% in recent weeks, and today is likely to be the day to test that level again.