UK government bonds slid to send benchmark yields to the highest since 2008, on concerns major central banks will continue to raise interest rates to quell inflation.

The yield on 10-year gilts jumped as much as 10 basis points to 4.75%, a 15-year high. Two-year rates, which are among the most sensitive to policy changes, rose as much as seven basis points to 5.27%.

Bonds are falling worldwide on the prospect of higher US interest rates after the minutes of the last Federal Reserve meeting showed officials largely remained concerned that inflation would fail to recede and suggested they may continue raising borrowing costs.

The surge in gilt yields also comes after sticky UK inflation and strong wage data boosted investor bets that the Bank of England will need to raise interest rates further to 6% and keep them high for longer.

“Even as the headline measure has been coming down, the latest print still leaves the UK with the highest inflation rate in the G7,” Deutsche Bank AG strategists including Henry Allen wrote in a note. The recent data means investors are pricing “a more aggressive path of rate hikes from the BoE over the months ahead,” they added.

The UK bond market is among the worst performers in the developed world this year, battered by persistently high inflation that is still running at more than triple the BOE’s 2% target. The 10-year gilt yield is up more than 100 basis points in 2023.

(Updates prices in second paragraph.)