Updates with further market reaction

LONDON, April 7 (Reuters) - Investors ramped up bets on the Bank of England cutting interest rates, pushing short-dated gilt yields sharply lower on Monday, after U.S. President Donald Trump said he would not dilute his sweeping import tariffs for global trade partners.

Interest rate futures pointed to about 88 basis points of reductions to the BoE's benchmark Bank Rate by December - more than fully pricing in three quarter-point rate cuts - compared with around 72 bps on Friday.

A first quarter-point rate cut by the BoE at its next meeting in May was almost 90% priced into the market.

Two-year gilt yields GB2YT=RR fell to their lowest since September 2024 at 3.814%, down 12 basis points on the day, while 10-year yields GB10YT=RR sank to their lowest since December at 4.379%, down 6 bps, before recovering to be 3 bps lower.

Thirty-year yields GB30YT=RR - which are less responsive to interest rate expectations - were 4 bps lower at 5.09%.

The falls in British government bond yields were less sharp than those for German bond yields - where 2 year yields EU2YT=RR were down more than 17 bps with around 82 bps of European Central Bank rate cuts priced in.

"With Europe facing both recession and disinflation from global trade disruption, we suspect ECB/BoE terminal rate pricing can shift lower still," market strategists at U.S. bank Citi wrote in a note to clients.

(Writing by David Milliken and William Schomberg; Editing by Kate Holton and Sarah Young)

((william.schomberg@thomsonreuters.com; +44 207 542 7778; Reuters Messaging: william.schomberg.reuters.com@reuters.net))