LONDON, April 29 (Reuters) - Investors upped their bets on Bank of England interest rate hikes later this year as oil prices jumped on Wednesday, a day before the BoE is expected to keep borrowing costs on hold as it awaits clearer signs of the Iran war's economic hit.
Interest rate futures were pricing around 73 basis points of increases - equivalent to almost three quarter-point hikes to the BoE's benchmark Bank Rate - by December, up from about 63 bps on Tuesday.
Oil prices jumped on Wednesday and the Brent contract hit a one-month high after a media report that the U.S. will extend its blockade of Iranian ports, likely prolonging Middle East supply disruptions.
Two-year gilt yields GB2YT=RR - which are sensitive to speculation about changes to Bank Rate - were about 13 bps higher on the day at 4.58% at 1515 GMT, the highest since March 27.
German two-year bunds EU2YT=RR were up by about 8 bps.
(Writing by William Schomberg, editing by Andy Bruce)