The yield on 10-year UK government bonds hovered just above 5.2%, rebounding from the lowest levels in more than two months as investors digested a series of strong UK economic releases. Oil prices also steadied, with Brent crude recovering some of its recent sharp losses.
According to ONS data, the UK economy grew by 0.7% in the third quarter, up from 0.5% in the previous quarter and in line with market expectations. On a year-on-year basis, growth accelerated to 1.9% from 1.4%, also matching forecasts, while monthly GDP rose by 0.2% in September, beating consensus estimates.
The robust figures reinforced expectations of further monetary tightening by the Bank of England, with markets now pricing in an additional rate hike before year-end and another increase by March. In the US, stronger-than-expected inflation data and hawkish comments from Federal Reserve officials have bolstered expectations of a December rate hike and increased the likelihood of a more aggressive 50-basis-point move.