Pegasus Capital

The £ 3mth LIBOR fix has been moving higher without any notion of change to BOE rate. As rates have been moving up generally, and there is always additional premium across the year-end turn, it is easy to overlook that higher credit risk is now appearing in the £ LIBOR fix. Market expectations for base rates over next 12 months have fallen back to zero, but £3m LIBOR is at a new cycle high of just above 0.9%

£3M Libor 06Dec18

PegasusCapital - 6/12/2018

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A View from the Bridge - May 2019

The Bank of England may attempt to send a message of near term optimism at its May meeting, perhaps steering the market towards a slightly higher probability of another rate increase in 2019, but we still see the likelihood of an actual increase in rates as remote until current Brexit uncertainties are resolved.

PegasusCapital - 1/5/2019