Those who were caught out lost money, said two senior employees in London
The Bank of England in London, Britain. Picture: REUTERS/HANNAH MCKAYAs the Bank of England’s policy decision was announced on November 4, gasps were heard on some London trading floors.
Bailey has previously defended the bank’s communication, saying that a November rate rise was clearly never a done deal and that it was not policymakers’ job to handhold traders. The difference between the price a seller will take for a two-year gilt and what a buyer will pay, called the bid-ask spread, has widened to more than the historical average, Refinitiv data shows. Some market participants said recent British debt auctions had also seen slower investor take-up.
Financial markets began to misinterpret the BoE’s messaging when Bailey told an October 17 panel discussion that it had “signalled, and this is another such signal, that we will have to act” to counter inflationary pressures.
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