U.K. government bonds dropped for the first time in three days amid speculation the Federal Reserve will begin to reduce asset purchases as soon as this month, removing downward pressure on global borrowing costs.
Five-year yields climbed toward the highest since September as the Debt Management Office sold 4.5 billion pounds ($7.36 billion) of the securities. German bunds and U.S. Treasuries also declined. The pound snapped two days of losses against the euro as Chancellor of the Exchequer George Osborne endorsed the Bank of England’s policy of providing forward guidance on interest rates. The Fed next meets on Dec. 17-18.