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BOE hike expectations rise as UK gilt yields jump to 5.08%

Traders are now pricing about 48 bps of BOE hikes by year-end, up from roughly 20 bps a month ago, as energy and shipping risks lift inflation expectations.

Reported · Written up by our desk · Central Banks

UK gilt yields climbed sharply, with 10-year yields rising more than 4 bps to 5.08%, the highest level in over two months, according to Forexlive.

The move reflects growing inflation expectations tied to higher energy prices and a more hawkish outlook for the Bank of England, with the report noting that traders are pricing around 48 bps of BOE rate hikes by year-end.

Forexlive also linked the pressure on global bond markets to renewed US and Iran tensions that could disrupt shipping in the Red Sea, worsening energy supply concerns.

In addition to inflation, the outlet said UK fiscal worries are returning, with investors demanding a higher yield premium to hold UK sovereign debt amid concerns about earlier policy announcements by the Burnham administration.

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