LONDON (Reuters) - Money markets on Friday were pricing in even less chance of a Bank of England rate rise in 2019 than on Thursday, with investors dialing back expectations of monetary tightening as Prime Minister Theresa May battles to salvage her Brexit deal.
Investors now price in an 86 percent chance of a 25 basis point rake hike before 2020 BOEWATCH. That is down from a more than 90 percent chance priced in by money markets on Thursday.
Markets had fully priced in a rate rise for next year before a wave of ministerial resignations on Thursday plunged May’s Brexit deal into jeopardy, sparking a sharp drop in sterling and a slide in British gilt yields.
Reporting by Tommy Reggiori Wilkes; Editing by Dhara Ranasinghe