UK gilt yields decline after last week's Trump tariffs surge

LONDON, April 14 (Reuters) - British government borrowing costs fell on Monday after sharp increases last week driven by worries about the fallout from U.S. President Donald Trump's trade tariff onslaught.

Thirty-year gilt yields GB30YT=RR - which last week soared by the most since the aftermath of Liz Truss's "mini-budget" in 2022 - were down by around 6 basis points at 5.456% at 0800 GMT.

Equivalent German borrowing costs were up about 3 bps.

Yields on two-year British gilts GB2YT=RR - which are sensitive to short-term speculation about official interest rates - were down by about 3 bps at 4.03%.

Investors were pricing 75 bps of Bank of England rate cuts between now and the end of December - equivalent to three quarter-point reductions - little changed from Friday but down from more than 90 bps on Thursday.

Around 50 bps of cuts were expected before Trump's April 2 tariff announcements.

BoE interest rate-setter Megan Greene said on Saturday it was unclear what the tariffs would do to UK inflation and that the unpredictable behaviour of the dollar was adding to the puzzle for the British central bank.