British 30-year government bond yields reached their highest level since 1998 on Wednesday, following a sharp increase in 30-year U.S. Treasury yields.
The rise was driven by U.S. President Donald Trump’s decision to impose 104% tariffs on China.
The yield on the 30-year British gilt hit 5.484% at 0830 GMT on the day, surpassing a previous multi-decade high of 5.472% set in January.
On Monday, the 30-year gilt yields saw a significant jump of nearly 19 basis points, marking the largest one-day rise since October 2022. This was a result of the fallout from the unsuccessful “mini-budget” proposed by former Prime Minister Liz Truss.
Meanwhile, ten-year gilt yields were higher at 4.72% at 0836 GMT. Conversely, two-year yields fell to 3.94%, as investors increased their expectations that the Bank of England (BoE) would need to implement rate cuts more quickly this year.
Interest rate futures currently anticipate 85 basis points in rate cuts by the BoE this year. They also predict a rate cut of at least a quarter point on May 8, following the BoE’s next meeting.
