Pound Slides to Lowest Since 2010 After Downgrade; Gilts Gain

The pound fell to its lowest level since July 2010 against the dollar after Moody’s Investors Service cut the U.K.’s AAA credit rating, sapping demand for the nation’s currency.

Sterling dropped to the weakest in almost 16 months against the euro as Moody’s said its decision was based on weakness in the nation’s growth outlook and challenges to the government’s plan to cut the deficit. U.K. government bonds gained after an aide of Democratic Party candidate Pier Luigi Bersani said there’s increasing risk another Italian election will be needed, spurring demand for safer assets.