Investors added to their bets on interest rate cuts by the Bank of England on Monday and two-year bond gilt hit a 3-month low as global markets reeled in response to U.S. President Donald Trump's announcement of import tariffs on trading partners.
Interest rate futures were pricing about 81 basis points of reductions to the BoE's Bank Rate by December this year at 0928 GMT, compared with 75 bps - which represented a full pricing of three quarter-point rate cuts - on Friday.
The chance of a quarter-point BoE rate cut on Thursday, after its February Monetary Policy Committee meeting, was seen as a 95% probability, also up from Friday.
Yields on short-term British government bonds hit their lowest since finance minister Rachel Reeves' Oct. 30 budget.
Two-year gilt yields fell to 4.165%, down about 5 basis points at 0923 GMT, while 10-year yields hit their lowest since Dec. 18 at 4.504%.
