(Bloomberg) -- Yields on U.K. two-year government notes touched their highest in about 6 1/2 years after a report showed inflation in Europe's second-biggest economy unexpectedly quickened in March to 3.1 percent, the fastest pace in a decade.
Benchmark gilts slid by the most in more than two months as traders added to bets rising consumer prices will prompt the Bank of England to lift interest rates twice more this year. BOE Governor Mervyn King said in a letter policy makers ``must ensure'' price expectations in the U.K. will be ``anchored.'' Inflation erodes the value of fixed income assets.
Read more at Bloomberg Bonds News
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