UK yields set for big weekly jump
Sterling lower even as traders pare back ratecut bets
Scale of bond, pound moves still far short of Sept 2022 rout
Markets calmer on Friday, some investors see opportunities

LONDON, Nov 1 Reuters Shortterm British government borrowing costs headed for their biggest weekly jump in over a year on Friday, while the pound faced its longest stretch of weekly losses in six years as Labour39;s taxandspend budget raised inflation expectations.

Twoyear gilt yields , which led the selloff as investors pared back rate cut expectations, have risen 26 basis points on the week, set for their biggest weekly increase since June 2023.

Benchmark 10year yields were up 21 bps, the biggest weekly move this year, having touched their highest in a year on Thursday at 4.526.

Yields however dipped on Friday and sterling edged higher, suggesting investor sentiment was calming.

While the surge in government borrowing costs and the drop in the pound are sizable, the speed and scale are far short of the crisis that rocked markets in September 2022 following thenPrime Minister Liz Truss39;s budget of billions in unfunded tax cuts.

2022 was something really quite off the scale. But that doesnt mean that what we saw this week wasnt important, City Index market strategist Fiona Cincotta said.

Yields have jumped as markets digest the government39;s plans, which will add nearly 70 billion pounds a year to the public spending bill, according to Britain39;s…