UK government bond yields rise after Bank of England holds rates; traders maintain interest rate hike bets

⑴ UK government bonds continued to decline after the Bank of England kept interest rates unchanged at 3.75% and stated it would be ready to take action at any time if inflation risks rise. The yield on two-year UK government bonds rose by 6 basis points to 4.20%. ⑵ The pound fell 0.5% to 1.322, extending its earlier decline. Traders maintained their bets on rising interest rates; swap contract pricing suggests a 33 basis point rate hike by the end of the year.