UK short duration gilt yields rise after BOE minutes

FXStreet (Mumbai) - The yields on the short duration gilt yields rose faster than those on the long duration yields after the Bank of England (BOE) minutes showed all members see bank rate is more likely to rise over a three year forecast period.

The 2-year yield, which is highly sensitive to short-term interest rate expectations, rose four basis points to 0.508%, while the 1-year yield advanced more than one basis points to 0.436%. Meanwhile, at the long-end for the curve, the 10-year yield currently trades almost two basis points higher to 1.588%.

The minutes also showed policymakers are optimistic that the wage and price inflation shall eventually catch up with the pace of economic growth. Though CPI is seen falling to negative in coming months, it still could bounce back after the effect of strong Pound fades away.

The upbeat comments on the economy and inflation pushed the yields higher across the Gilt yield curve.