The U.K. faces further downgrades after its AAA rating was cut by Moody’s Investors Service, and such a move would be unlikely to cause investors to sell gilts, according to Pacific Investment Management Co.’s Michael Amey.
“I wouldn’t be at all surprised if we get a second downgrade and if it comes reasonably soon,” Amey said in an interview on Bloomberg Television’s “The Pulse” with Francine Lacqua. “I’d be surprised if there’s a lot of forced selling on a further move.”
Amey also said the Bank of England is likely to resume purchases of government bonds, probably starting with a 25 billion-pound increase in its Asset Purchase Facility.
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