/STIR: Reacting To BoE Chief Econ Pill's Assertion That Time For Cuts Is "Still Some Way Off"

Gilts come under light pressure and pay-side flow creeps into BoE-dated OIS as BoE chief economist Pill stresses the need to ensure that inflation is “squeezed out” of the UK, with restrictive interest rates required until that is the case. He also stressed that the Bank would need to act if energy prices jumped, while noting that in his view, the time for rate cuts is “still some way off.”

• Gilt futures trade back towards session lows, last -71, but stick to a fairly contained range dealing either side of 100.00 thus far.
• Cash gilt yields are 4-10bp higher, bear flattening, with 5s under the most pressure.
• SONIA futures last show +0.5 to -12.5, at/just off fresh session lows in the main.
• BoE-dated OIS discounts ~104.5bp of cuts through ’24.