Gilt yields continue steady decline

The UK 10-year gilt yield fell below 3.5% yesterday as investors continued to move out of the troubled eurozone.

UK government bonds are currently seen as a safe haven asset by many investors, with the benchmark bond yield dropping two basis points to 3.49%. Sterling also strengthened to its highest level against the euro since November 2008 yesterday. German government bonds are also a beneficiary of the ‘flight to quality', with the yield on the 10-year bund also dropping two basis points to 2.56% yesterday. Italian and Spanish bonds were the hardest hit of the major European nations, with yields on 10-year sovereign bonds climbing eight and seven basis points respectively. Ignis head of...