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U.K. Government Bonds Up on BOE Signals

U.K. government bonds rose for a third day after Bank of England Governor Mark Carney said officials won’t rush to raise interest rates amid signs Britain’s recovery is gaining traction.

The pound erased a decline against the euro before a report tomorrow that analysts said will show the economy expanded in the third quarter. Parliament’s Treasury Committee questioned Carney, Deputy Governor Charles Bean, Chief Economist Spencer Dale and policy maker Ben Broadbent about the the U.K. outlook. Carney said growth is expanding at the fastest pace among developed nations and a tighter monetary policy “is not the expectation.”

“While the U.K. economy is doing well, it is not a one-way story and there are still some soft patches there,” said John Stopford, head of fixed-income at Investec Asset Management in London. “We would take Carney’s words at their face value that the Bank of England is not in a hurry to raise interest rates. Gilts are looking relatively cheap following recent underperformance against other major markets.”

Bloomberg [1]

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