Bloomberg News

Pimco Sees Limited Forced Sale of Gilts on U.K. Downgrade

February 25, 2013

The U.K. faces further downgrades after its AAA rating was cut by Moody’s Investors Service, and such a move would be unlikely to cause investors to sell gilts, according to Pacific Investment Management Co.’s Michael Amey.

“I wouldn’t be at all surprised if we get a second downgrade and if it comes reasonably soon,” Amey said in an interview on Bloomberg Television’s “The Pulse” with Francine Lacqua. “I’d be surprised if there’s a lot of forced selling on a further move.”

Amey also said the Bank of England is likely to resume purchases of government bonds, probably starting with a 25 billion-pound increase in its Asset Purchase Facility.

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

To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net


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