U.K. Bonds Drop as Rate Speculation Sends Yields to 6-Week High
- Fed referred to its December meeting in liftoff discussions
- Two-year gilt yield climbs to highest level since September
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U.K. government bonds fell for a second day, pushing 10-year gilt yields to the highest level in almost six weeks, after Federal Reserve officials resurrected speculation they will raise U.S. interest rates in December, a move many investors view as a precursor to a liftoff by the Bank of England.
Gilts slumped after the Fed dropped a reference to global risks and referred to its “next meeting” on Dec. 15-16 as it discussed the timing of an increase in a statement released Wednesday. The securities had been supported by bets the BOE would wait for a Fed move, with the two-year gilt yield sliding the most this year on Sept. 18, the day after U.S. officials’ previous policy announcement.