BOE Faces Pressure to Raise Rates Amid Global Bond Rout

The Bank of England is facing mounting pressure to raise interest rates amid a global bond market rout fueled by concerns over runaway government borrowing and sticky inflation. Investors have warned that failing to do so would risk the Bank 'losing credibility'.

Government bonds across the developed world have been swept up in a historic sell-off, with oil prices surging to multi-month highs. The yield on America's 10-year Treasury, the benchmark for global debt markets, jumped above five per cent for the first time since 2007.

The UK's sovereign debt, issued via bonds known as gilts, has been offloaded more aggressively than that of any other major economy. The 30-year gilt yield neared six per cent on Tuesday, its highest level since 1997.

Anthony Brinkman, high yield portfolio manager at Principle Asset Management, said: 'The recent gilt market movements seem to be intent on showing central banks they are out of time, the market is expecting action.'