Adds analyst comment in paragraphs 5 and 9, sterling move in paragraph 12, context and background throughout

By Suban Abdulla

LONDON, Jan 15 (Reuters) - British government bond yields fell from their recent highs on Wednesday, easing pressure on the government, after official data showed a surprise drop in headline inflation to 2.5% and the weakest services price increase since March 2022.

Two-year gilt yields GB2YT=RR, which are especially sensitive to short-term expectations about interest rates, were down about 11 basis points on the day to 4.491% by 1136 GMT, their lowest since Thursday last week.

Thirty-year yields GB30YT=RR - which hit their highest since 1998 on Monday at 5.472% - were 8 bps lower at 5.37%, while 10-year gilt yields GB10YT=RR were 8 bps lower at 4.81%.

Movements in longer-term yields are typically driven by international factors.

British gilt yields have risen along with global yields recently, in part driven by expectations of increased U.S. inflation pressures once Donald Trump takes over the White House against the backdrop of an already strong U.S. economy.

Tomasz Wieladek, chief European economist at investment managers T. Rowe Price, said the UK inflation data showed the British and U.S. economies were on different paths, raising the possibility that gilts could become less tethered to Treasuries.

"Gilt yields, especially at the short end of the curve, should start reflecting this," he said. "They will likely be less responsive to further U.S. selloffs going forward."

Wednesday's data offered some relief to finance minister Rachel Reeves, who is facing pressure over the slow economy and her Oct. 30 budget plan, which included increases in payroll taxes that economists say are likely to push up inflation as well as borrowing.

Investors priced in a greater chance of Bank of England rate reductions this year after the price growth figures.

Financial markets now show an 84% chance of a quarter-point cut at the BoE's next rate decision announcement on Feb. 6 and a near 100% chance of another one later in the year, up from around 60% on Tuesday.

Analysts at ING said Wednesday's softer inflation reading should help gilts and limit "downside risks for the pound".

Sterling fell after the inflation data was released but then reversed course to be broadly flat on the day.

Despite the softer reading, price growth remained above the BoE's 2% target, and many analysts expect it to rise above 3% in 2025.

"There is probably still enough in this release to make the BoE feel comfortable easing in February, with growth prospects also having softened further of late," Allan Monks, an economist at J.P. Morgan, said. "But there are still plenty of reasons for the Bank to do so very cautiously."

(Additional reporting David Milliken;Editing by William Schomberg and Emelia Sithole-Matarise)

((david.milliken@thomsonreuters.com; +44 20 7513 4034;))