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Date: Friday 22 Aug 2008

LONDON (ShareCast) - Bonds fell across the main markets for a second day in a row as inflation fears dominated the agenda.

In the US, comments from Federal Reserve chairman Ben Bernanke that the Federal Reserve may act to ease inflation raised the prospect of a rates rise, lessening the appeal of bonds to investors.

The yield on a 10-year treasury gained six basis points to sit at 3.88%.

Expectations that the European Central Bank will raise rates to curb inflation had German bonds on the back foot.

The yield on a 10-year bund rose seven basis points to 4.25%.

UK bonds also fell back despite some gloomy GDP data strengthening the case for a rate cut.

The yield on a 10-year gilt was up by five basis points at 4.63%.

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