There was never any true confirmation as to if this Bayonetta would achieve a sequel, but now the outlook looks dismal.

Some speculate that Bayonetta 2 might have been one of the unnamed games that Sega was planning.  That project was scrapped in response to their company-wide restructuring.  The restructuring is due to “rapid change” in the game market which has cost the company some money.  With the changes however, and market conditions, Sega is predicting severe losses

Bayonetta will get a cameo-styled this summer in Platinum Games’ multiplayer brawler Anarchy Reigns, which will be published by Sega in July.

Source: Games Spot