Gilts Gain as Europe Debt Crisis Spurs Safety Demand
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U.K. government bonds gained for a second week and the pound strengthened versus the euro amid signs the euro-region debt crisis is deepening.
Ten-year gilt yields dropped to the lowest in six weeks as Moody’s Investors Service downgraded Italy’s bond rating by two levels and reiterated its negative outlook. Sterling climbed to the strongest since November 2008 against the euro as investors bet the U.K. economy will outperform after the Bank of England released details of a new lending program to limit contagion from the single-currency area.