UK gilts fall after BoE keeps policy rate unchanged; Governor Carney’s speech in focus

The United Kingdom’s gilts fell during European session Thursday after the Bank of England (BoE) remained on hold in its monetary policy decision, with all nine members of the policy committee voting in favour of no-change. Investors will now remain focussed on the central bank Governor Mark Carney’s speech, scheduled for September 14 for further direction into the debt market.

The yield on the benchmark 10-year gilts, jumped nearly 1-1/2 basis points to 1.496 percent, the super-long 30-year bond yields remained tad 1/2 basis point higher at 1.846 percent and the yield on the short-term 2-year traded nearly 3 basis points higher at 0.812 percent by 11:05GMT.

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2 percent inflation target, and in a way that helps to sustain growth and employment.  At its meeting ending on 12 September 2018, the MPC voted unanimously to maintain Bank Rate at 0.75 percent.

The Committee also voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at GBP10 billion.  The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at GBP435 billion.

Meanwhile, the FTSE 100 slipped 0.18 percent to 7,299.88 by 11:15GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained slightly bullish at 85.64 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex