Member Article

BOE quantitative easing boosts UK government bond prices

The prices of 10 year UK government bonds have been driven up due to Bank of England planning £75bn quantitative easing (QE).

Today investors put their money to UK 10-year government bonds, pushing yields down to 1.47%, lowered than the US 10- year government bond at 1.48%. This suggests that investors saw the UK as a safer market than the US.

The Bank of England boosted the QE programme by £75bn, far more than £50bn planned two weeks ago.
QE contains buying UK government bonds, or gilts, driving these prices up and pushing yields lower.

The fall in the bond yield could lower the rate at which the UK can borrow money.

Gary Jenkins of Swordfish Research, said: “ I suppose you have had some governments who have said we’re going to carry on spending and they destroyed their credibility in the bond market very quickly. You could give credit for that.“

This was posted in Bdaily's Members' News section by Yu-Chih Lin .