Sterling briefly jumps, UK gilts fall on UK CPI

LONDON, May 13 (Reuters) - Sterling briefly jumped and UK gilts futures fell, while stocks wiped gains on Tuesday after a strong reading of British consumer prices placed a question mark over whether the Bank of England will cut rates in June.

Figures showed that British consumer prices surged 0.8 percent in April from March, exceeding expectations for a 0.5 percent rise. Annual inflation leaped 3.0 percent, versus forecasts for a 2.6 percent. Click on [nONS003519]

Sterling jumped to a session high of $1.9594 <GBP=> from $1.9520 before the announcement, momentarily erasing earlier losses and edging away from $1.9441 hit on Monday, its lowest level in nearly three months.

The euro fell 0.3 percent to 79.16 pence <EURGBP=>, retreating from a three-week high hit earlier in the day.

Short sterling contacts -- a gauge of future interest rates -- fell sharply to trade as much as 11 ticks lower, having been as much as four ticks higher prior to the data.

The June gilt future FLGM8 was 23 ticks lower at 108.73.

Bund futures FGBLc1 pared earlier gains and were last three ticks up on the day at 115.05, having traded around 115.11 before the data. December interest rate futures turned negative and were last 0.5 ticks lower.

Britain's FTSE 100 .FTSE share index gave up gains to trade flat at 6,220.4.

"It was a pretty horific headline number... and it limits the scope for monetary easing from the Bank of England, it will be hard for them to cut in June," said Lee Hardman, currency economist at BTM-UFJ.

(Reporting by London Markets Team)