GBP Pressured as Gilt Yields Hit 5.08%, BOE Rate Hike Bets Intensify

UK gilt yields have surged sharply, with 10-year yields climbing over 4 basis points to 5.08%, marking their highest level in more than two months. The move reflects growing market expectations for further Bank of England rate hikes as persistent inflationary pressures continue to dominate the UK economic landscape. The bond selloff has intensified focus on GBP pairs, with rising yields typically supporting sterling in the near term but also raising concerns about the broader economic impact of tighter monetary policy. Market participants are repricing BOE rate expectations higher, with swap markets now pricing in increased probability of additional tightening at upcoming meetings. For GBP/USD traders, the divergence between BOE and Federal Reserve policy paths remains a key driver. Near-term resistance for GBP/USD sits near recent highs, while support is anchored around key moving averages. Traders should monitor upcoming UK inflation and employment data closely, as further upside surprises could accelerate rate hike bets and amplify gilt market volatility, creating both opportunities and risks for sterling-denominated pairs.