Carney’s Rate Stance Pushes U.K. 10-Year Bond Yields Below 2%
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When Bank of England officials say the interest-rate outlook is data-dependent, all bond investors hear is borrowing costs will stay lower for longer.
Gains in U.K. government bonds today pushed 10-year yields below 2 percent for the first time in almost six weeks as a slump in mortgages added to signs the U.K. recovery is losing momentum. With officials from BOE Governor Mark Carney to Chief Economist Andy Haldane emphasizing risks to growth, investors don’t see a rate increase until beyond October. The pound fell versus the euro as Carney told lawmakers today that increases in borrowing costs will likely be limited and gradual.