BOE Rate-Cut Speculation and Bond Market Dynamics

Bank of England considers interest-rate cuts as UK's business activity data shows signs of sticky inflation. The Treasury will pay over GBP170 billion to the Bank of England due to quantitative easing-related costs. Economists urge the BOE to halt sales of long-dated government bonds and switch to the short end to reduce losses. Fund managers are betting on interest rate cuts after piling into government bonds, with Bloomberg's gilt index showing investors have lost over 4% this year. The Bank of England's decision to halt rate hikes temporarily provides hope for British government bonds, but concerns about inflation spikes and fiscal policy remain.