UK bond yields jump in post-bank holiday session

LONDON, May 5 (Reuters) - ​British government ⁠bond yields rose ​sharply on Tuesday, catching up on ​a ‌surge in borrowing costs elsewhere on ⁠Monday when UK markets ⁠were closed for ​a national holiday, as the stand-off in the Strait of Hormuz escalated.

Yields on ​UK ‌gilts climbed by between 7 and 9 basis points across the maturity range in ​early trade as the latest spike ‌in oil prices fueled inflation concerns.

Investors are also keeping ‌an eye on local elections on Thursday which may add to pressure ​on Prime Minister Keir Starmer and raise ‌questions about Britain's future fiscal policy if he is replaced as leader ⁠of ⁠the Labour Party.

Financial ‌markets were pricing in two or possibly ​three interest ​rate hikes by the ‌Bank of England by the end of 2026.