Nov. 6 (Bloomberg) -- Gilts may struggle to outperform after the Bank of England extended its so-called quantitative- easing program yesterday by 25 billion pounds ($42 billion), according to Nomura International Plc.

“We are wary that this period merely delays the inevitable exit, and that pressures will no doubt mount again as the time comes for this finally to be withdrawn,” strategists including Sean Maloney in London wrote today in a report. “However, we also note that the Debt Management Office is around 70 percent done on its current fiscal-year remit. In short, the quantitative-easing shadow continues to hang over the gilt market, but the extent of underperformance against U.S. and euro- zone counterparts may be nearing a peak.”

To contact the reporter on this story: Daniel Tilles in London at dtilles@bloomberg.net

Last Updated: November 6, 2009 03:52 EST