Gilt Yields Fall to Record Lows as BOE Reduces Growth Outlook

The yields on 10- and 30-year gilts plunged to the lowest on record this week as the Bank of England said Britain faces a “markedly weaker” outlook for economic growth, signaling it may expand monetary stimulus.

The pound was set for its biggest weekly decline against the dollar in almost two months. Central bank Governor Mervyn King, speaking at a Nov. 16 press conference after publication of the quarterly Inflation Report, said growth may be “broadly flat” in the first half of 2012. “There is no meaningful way to quantify the most extreme outcomes associated with developments in the euro area,” he said.