Bloomberg News

Gilts Rise as U.K. Home Prices Stall; Pound Snaps Two-Day Gain

February 27, 2012

Feb. 27 (Bloomberg) -- U.K. 10-year government bonds rose for a fifth day as property researcher Hometrack Ltd. said U.K. house prices stagnated for a second month in February.

The pound snapped a two-day advance against the dollar and fell from a six-month high against the yen. The average cost of a home in England and Wales was unchanged from January and 1.4 percent lower than a year earlier, Hometrack said today. The number of potential buyers registering with estate agents rose 18 percent over the month, the largest gain for five years.

The 10-year gilt yield fell three basis points to 2.04 percent at 9:27 a.m. London time. The 3.75 percent security due September 2021 rose 0.23, or 2.30 pounds per 1,000-pound ($1,587) face amount, to 114.69. Two-year yields were little changed at 0.37 percent.

The pound was little changed at $1.5867 and 84.65 pence per euro. It declined 0.6 percent to 128.08 yen after touching 129.73 yen, the strongest level since Aug. 4.

Gilts have handed investors a 1.1 percent loss so far this year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German government bonds are little changed for the year and U.S. Treasuries slipped 0.3 percent.

Sterling has dropped 1.3 percent in 2012, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The dollar declined 3.5 percent and the yen tumbled 8.8 percent.

--Editors: Paul Dobson, Mark McCord

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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