LONDON, May 25 Reuters British bond prices tumbled again on Thursday as investors added to bets that high inflation will force the Bank of England to carry on raising interest rates, with twoyear gilts on track for one of the biggest weekly falls in 20 years.

Gilt yields, which move inversely to prices, were last up on the day around 11 to 17 basis points bps over the range of maturities, adding to a similar jump on Wednesday as markets reeled from strongerthanexpected inflation data.

The moves represent a sharp tightening of financial conditions in Britain and are likely to concern BoE officials, with bond yields nearing levels seen during the minibudget turmoil in financial markets last September and October.

The twoyear gilt yield , which is especially sensitive to BoE rate expectations, rose on Thursday to its highest level since Sept. 29 at 4.55, up 18 bps on the day.

So far this week the twoyear yield has risen about 60 bps. Excluding the minibudget announcement a week in which the yield soared by 89 bps the increase would be the biggest since similar moves during the 20082009 market crisis.

Craig Inches, head of rates and cash at Royal London Asset Management, said the sharp price moves had definitely resulted in some pain for investors, with liabilitydriven investment funds LDIs who service pension funds holding back on buying.

However, despite all of this, the moves have been orderly and the market is still functioning okay despite the yield moves, he…