GBP/USD Under Pressure as UK Gilt Yields Hit 5.08%, BOE Hike Bets Rise

GBP/USD is facing complex cross-currents as UK 10-year gilt yields surged over 4 basis points to 5.08%, their highest level in more than two months. Rising gilt yields are fueling increased market expectations for a Bank of England rate hike, reflecting persistent inflationary concerns in the UK economy. While higher yields can theoretically support sterling through interest rate differentials, the sharp move in bond markets also raises concerns about fiscal sustainability and economic strain, creating a mixed backdrop for GBP. The bond market selloff mirrors broader global fixed-income weakness but is particularly pronounced in UK gilts, drawing comparisons to previous episodes of gilt market stress. EUR/GBP is also in focus as traders assess the divergent monetary policy paths between the BOE and ECB. Near-term resistance for GBP/USD remains around the 1.3000 psychological level, while support is found near recent consolidation zones. Traders should watch upcoming UK inflation data and BOE communications for further directional cues on sterling positioning.