BoE to start hiking rates at the end of 2015

The UK labour market is strong and real wages will continue to pick up gradually as the labour market tightens further. 

"Thus, despite below-target inflation, it is forecasted that the BoE will start hiking rates at the end of this year. Rates will be lifted gradually, reaching 1.75% by end-2016. The risk to this forecast is, still skewed towards a somewhat later rate hike. This is partly due to the stronger GBP", says Nordea Bank.

Longer UK yields have hit their highest level this year, and have also seen their share of volatility lately. While short-term swings are likely to prevail, the recent rise is unlikely to continue during the summer. 

The current levels are not in line with an economy growing rather briskly and a central bank moving closer to raising rates. In other words, higher yields are ahead.