The UK is drifting further away from Europe—at least in the bond markets.

Driven by differing growth outlooks and divergent central bank policies, a gulf has opened up between UK and German yields in 2013. In the near term, US monetary policy looks set to push yields in both markets higher, along with Treasury yields, as the Federal Reserve starts winding down its bond purchases. But factors closer to home mean the yield gap could get wider yet in 2014.