U.K. Production Sees Bonds Rise for Second Week

U.K. government bonds advanced for a second week, with 10-year yields falling the most since September, as reports showed service growth slowed last month and industrial production stagnated in November.

Benchmark 10-year yields dropped to the lowest level in three weeks as U.S. payroll growth slowed, reviving demand for the relative safety of fixed-income assets. Gilts slumped last month, with yields climbing to the highest since July 2011 at the start of January, amid speculation the global economy was gathering pace. The pound posted its third weekly gain in four weeks against the dollar.

“The data poured some cold water on the idea that the U.K. is at the front of the queue to tighten policy,” said Marc Ostwald, a rates strategist at Monument Securities Ltd. in London. “There’s probably been a little too much priced into the gilt curve. The bigger boost for gilts this week came from U.S. payrolls.”


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