World Economy

UK 10-Year Gilts at New Low

UK 10-Year Gilts at New LowUK 10-Year Gilts at New Low

The yield of Britain’s benchmark 10-year government bonds hit another record low on Monday as a batch of data painting a somber outlook for the British economy sent investors scrambling for safe-haven assets such as gilts, Reuters reported. The yield on 10-year gilts fell to as low as 0.710%—almost half its level on June 23, when Britons voted to leave the European Union, confounding investors’ expectations and raising concerns about Britain’s economic resilience. Three reports released overnight showed that British consumer spending fell last month, the business outlook darkened by the most in four years and economic activity in London slowed sharply. Markets had already priced in a 25 basis point cut in the key interest rate when Bank of England policy makers meet on Thursday—their first meeting after the country’s historic vote to leave the EU. Yields on British 20- and 30-year government bonds also fell but stayed above the record lows hit last Thursday. Gilt futures rose some 40 ticks to a new contract highs of 130.71.