Bloomberg News

U.K. 10-Year Yield Heads for Biggest Weekly Drop in Three Months

November 04, 2011

Nov. 4 (Bloomberg) -- U.K. 10-year gilts headed for their biggest weekly gain in more than three months amid concern that Greece’s government may collapse as soon as today, boosting demand for gilts as a haven.

Two-year yields dropped for the first time in three days. Greek Prime Minister George Papandreou, who yesterday scrapped a referendum on the nation’s latest bailout package, faces a confidence vote in parliament after opposition leader Antonis Samaras rejected sharing power. The pound declined against the dollar and the euro.

The two-year yield fell two basis points, or 0.02 percentage point, to 0.54 percent at 9:14 a.m. London time. The yield dropped this week to 0.435 percent, the lowest since Bloomberg started collecting the data in 1992. The 4.5 percent note due March 2013 gained 0.01 or 10 pence per 1,000-pound ($1,600) face amount, to 105.255. The 10-year rate was little changed at 2.39 percent.

U.K. government bonds have returned 13 percent this year, indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies show. German bunds rose 7.7 percent and Greek bonds plunged by 50 percent.

The pound fell 0.2 percent to $1.6007 and was 0.3 percent weaker at 86.39 pence per euro.

Sterling has gained 1 percent in the past three months according to Bloomberg Correlation-Weighted Indexes, which track the currencies of 10 developed nations. The dollar rose 3.3 percent in the period.

--Editors: Matthew Brown, Nicholas Reynolds

To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at

To contact the editor responsible for this story: Daniel Tilles at

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