UK Borrowing Costs Plummet Following Surprise Drop in Inflation

U.K. government borrowing costs fell sharply Wednesday morning as a cooler-than-expected inflation print rippled through markets.

The yield on two-year U.K. government bonds, which are sensitive to rate expectations, was down 24 basis points to 4.843% by 8:35 a.m. BST as investors pared back expectations for the Bank of England’s peak rate to 5.75% from 6%. Peak rate bets rose as high as 6.5% earlier in the month.

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