29 Jan 2015
UK 10-year Gilt yield falls to record low
FXStreet (Mumbai) - The UK 10-year Gilt yield fell to record low of 1.936%, after breaching the previous low of 1.407% seen in July 2012 levels.
Gradual rate hike path and low inflation outlook
The yields fell after the Bank of England governor, at a speech in Dublin yesterday, cautioned about low inflation in the short-term, while stating the liftoff in the interest rates from the record lows shall be be more gradual than earlier expected. Carney warned that inflation is likely to turn negative, which led investors to push the back the expectations of interest rate hike.
Similar concerns were echoed in Monetary Policy Committee’s January meeting, where policymakers said there is “a roughly even chance that CPI inflation would temporarily dip below zero at some time during the first half of 2015.”
The 10-year break-even rate, a measure of the outlook for retail-price inflation derived from the difference in yield between gilts and inflation-linked securities, fell three basis point to 2.32%, its lowest since August 2012.
The 30-year Gilt yield also fell to a record low of 2.102%.
Gradual rate hike path and low inflation outlook
The yields fell after the Bank of England governor, at a speech in Dublin yesterday, cautioned about low inflation in the short-term, while stating the liftoff in the interest rates from the record lows shall be be more gradual than earlier expected. Carney warned that inflation is likely to turn negative, which led investors to push the back the expectations of interest rate hike.
Similar concerns were echoed in Monetary Policy Committee’s January meeting, where policymakers said there is “a roughly even chance that CPI inflation would temporarily dip below zero at some time during the first half of 2015.”
The 10-year break-even rate, a measure of the outlook for retail-price inflation derived from the difference in yield between gilts and inflation-linked securities, fell three basis point to 2.32%, its lowest since August 2012.
The 30-year Gilt yield also fell to a record low of 2.102%.