UK Bond Yields Climb With Pound as Inflation Dents Rate-Cut Bets

UK bonds fell and the pound gained after data showed UK inflation rose more than expected in April, leading traders to pare bets on further interest-rate cuts from the Bank of England.

Yields on policy-sensitive two-year gilts rose three basis points to a seven-week high at 4.08%, while sterling rose as much as 0.6% to $1.3469, the strongest since February 2022. For the first time since the global financial crisis, options traders are no longer bearish on the pound over the long term.