2-year British government bold yield surged to its strongest level since May 2019 at 0.74% on Monday as investors continue to price the expectation for a Bank of England (BoE) rate hike amid surging energy prices.

Currently, the yield on the 2-year UK gilt is up nearly 25% on a daily basis at 0.7255. According to Reuters, a 15 basis points rate increase by the end of this year is now fully priced in.

Market reaction

The British pound remains on the back foot during the European trading hours on Monday and the GBP/USD pair was last seen losing 0.2% on a daily basis at 1.3723.