UK gilt yields jump ahead of 10-year auction amid uncertainties over Brexit deal

The United Kingdom’s gilt yields jumped during European trading hours Monday, ahead of the country’s 10-year auction, scheduled to be held on August 20 amid hovering uncertainties over a Brexit deal, to be wrapped up by October 31.

The yield on the benchmark 10-year gilts, jumped 3 basis points to 0.497 percent, the 30-year yield surged 6 basis points to 1.069 percent and the yield on the short-term 2-year traded 1 basis point higher at 0.513 percent by 11:10GMT.

While the government attempted to play down the findings from the weekend’s leaked paper predicting that a no-deal Brexit would lead to, among other damaging impacts, severe extended delays to medical supplies, food and petrol shortages, and the return to a hard border in Ireland, business groups admitted that many companies, particularly small firms, were still ill-prepared for a no-deal Brexit on October 31, blaming a lack of clarity and financial assistance from the government, Daiwa Capital Markets reported.

And the week’s CBI industrial trends (tomorrow) and distributive trades (Thursday) surveys are likely to further reinforce the negative impact of continued Brexit uncertainty already being experienced by manufacturers and retailers alike, the report added.

Meanwhile, the FTSE 100 traded 1 percent higher at 7,188.12 by 11:15GMT.