The UK's pound has outperformed all major European currencies in March, including the Norwegian Crown and the euro, despite expectations of Bank of England rate cuts. This outperformance has been seen as a surprise as it stands in contrast to its usual trading pattern. The rise in interest rates indicates a potential increase in inflation, as Britain's two-year gilt yield has risen by 60 basis points due to fears of higher energy prices. The gap between one-year euro and sterling overnight interest rate swaps moved 20 bps in the pound's favour from late February to March 16. However, analysts doubt this trend will continue, with concerns about Britain's finances starting to grow.