The market is ramping up BOE rate hike expectations

That of course follows the more hawkish remarks by Bailey over the weekend here.

It's important to also put into context the remarks by Bailey as he does put a few caveats associated with any move that the BOE may take in the coming meetings:

"I continue to believe that higher inflation will be temporary, because it is in the nature of the underlying causes. But the energy story particularly means that it will last longer and it will of course get into the annual numbers for longer as a consequence of that. And that of course raises for central banks the fear and concern of embedded inflation expectations. As I've said before, monetary policy cannot solve supply side problems, but it will have to act and must do so if we see a risk particularly to medium-term inflation and to medium-term inflation expectations, and that is why we at the BOE have signalled - and this is another such signal - that we will have to act. But of course that action comes in our monetary policy meetings."

UK 2-year gilt yields have surged higher today as seen earlier here and that is in part to do with rising rate hike odds for the BOE going into next month.