LONDON - British short-dated government bond yields surged on Wednesday, hitting fresh 14-year highs as investors worried about surging energy prices and the knock-on effect for inflation and Bank of England interest rates.

Two-year gilt yields leapt more than 20 basis points on the day to as high as 2.955%, the highest since November 2008 when Britain was sliding into the global financial crisis.

Investors were pricing the BoE's benchmark Bank Rate peaking at 4.5% in May next year, more than double its current level of 1.75%, according to rate futures.

(Writing by William Schomberg; editing by David Milliken)