Gilts Have Weekly Drop on U.K. Recovery; Pound Rises Above $1.60

U.K. 30-year bonds declined in the week as a report showing industrial production surged in July added to signs Britain’s recession is easing.

Borrowing costs touched the highest in more than two months after European Central Bank President Mario Draghi’s plans to stem the sovereign debt crisis eroded demand for haven assets. The pound touched a four-month high above $1.60 versus the dollar as today’s factory data followed a purchasing managers’ index this week that showed services expanded more than economists estimated. Ten-year gilts reversed an intraday decline after a report showed the U.S. economy added fewer jobs than analysts estimated last month.