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Gilts keep climbing

Date: Wednesday 24 Feb 2010

Gilts continued climbing after yesterday’s comments from Bank of England governor Mervyn King that the UK's quantitative easing programme may restart if the UK economy takes another downturn.

This month's meeting of the Bank's Monetary Policy Committee paused the £200bn programme, but King indicated he is concerned about the weakness of the global economy and its impact on UK exports.

"My particular concerns at present derive from the state of the world economy. Recovery in our largest export market -- the euro area -- appears to have stalled," he said.

The yield on 10-year gilt was nine basis points lower at 4.09%.

US investors are awaiting testimony from Federal Reserve chairman Ben Bernanke, which may provide some direction to bonds, which are currently flat.

The yield on a 10-year treasury is unchanged at 3.69%.

News in mainland Europe continues to be dominated by the turmoil in Greece. Government offices, schools and universities are all shut, while hospitals have brought in emergency staff. Journalists are also on a 24-hour strike, meaning that no newspapers will be published.

However, the bond markets are relatively quiet, with the yield on Germany’s benchmark 10-year bund down three basis points at 3.14%.

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