[Middle East War Rewrites Bank of England's Playbook, Traders Bet on Three Rate Hikes This Year] Jin10 News, March 19 – After Bank of England policymakers stated they are prepared to 'take action' to address any inflation surge potentially triggered by the Middle East war, traders sold off UK government bonds, with the two-year gilt yield surging over 30 basis points at one point to 4.41%. At the same time, traders increased their bets on Bank of England rate hikes. The swaps market now anticipates nearly 70 basis points of rate hikes by the end of the year, equivalent to approximately three 25-basis-point hikes, with the first hike expected next month. In the latest rate decision, all nine members of the Monetary Policy Committee unanimously voted to keep rates unchanged at 3.75%. Governor Bailey warned that policy must 'address the risk of a more lasting impact on UK CPI inflation from the Middle East situation.' This marks a dramatic shift in expectations. Less than three weeks ago, given the weak labor market, the market was highly confident that the Bank of England would cut rates today.