There was a Gilts sell off after the BoE announcement and the pressure on wider markets intensified after the decision, which showed 3 MPC members voting for a 50 bp hike. Markets were already spooked by the unexpected 50 bp move from the SNB this morning and 10-year rates are now up 24.1 bp in Switzerland, 24.5 bp in Germany and 22.4 bp in the UK.
The UK rate has jumped 19.4 bp to 3.477% now. Eurozone peripherals are outperforming, suggesting that the ECB’s signal on a new crisis tool to keep a lid on spreads is helping – at least for now. Stock markets are selling off in this environment, with the GER40 down -2.9%, the UK100 -2.6% and US futures also sharply lower led by a -2.9% correction in the USA100.