LONDON (Reuters) – Money markets no longer expect the Bank of England to hike interest rates in 2019, as investors slashed their bets on monetary tightening after Dominic Raab resigned on Thursday as Britain’s Brexit minister.

Investors now price in a 25 basis point rate hike from the BoE in 2020, having priced out such a move for next year BOEWATCH. Money markets had previously priced in one hike – from current levels of 0.75 percent – before December 2019.

Raab resigned on Thursday in protest at Prime Minister Theresa May’s Brexit deal, throwing her government into political turmoil. The re-pricing in money markets came as sterling fell sharply and British government bond yields tumbled.

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