The strong US producer price index has unsettled the market. I think we can look forward to a lot more unsettling inflation numbers and talk about interest rate hikes in the next few months. These should provide better opportunities to buy Short Sterling and long Gilts.
In the charts below, I have taken the series for UK and US CPI and extrapolated forward for a year. I have assumed no change in prices for the coming 12 months — what the red sections of the charts show are the base effects of last year’s volatility in the CPI series. The headline year-on-year inflation numbers are likely to be high for a while, for no other reason than that they were falling sharply a year ago.

Data from the Office for National Statistics and the Bureau of Labour Statistics.