The yield on UK 10-year government bond jumped to 0.75% ( at time published) on Tuesday, its highest level since June 23rd, as investors are bracing for the release of US consumer price data later today.
Yields were already rising following hawkish comments by Bank of England and Federal Reserve officials ahead of central bank meetings next week.
Last week, Bank of England governor Andrew Bailey said last week the central bank would probably be forced to raise interest rates to combat inflationary pressures over the next two to three years, even as Britain’s economic recovery from Covid-19 is slowing; while policymaker Michael Saunders said the central bank may need to raise interest rates next year if growth continues and inflation becomes stickier.
