The UK gilts jumped Thursday after the Bank of England (BoE) downgraded its growth and inflation forecasts of the economy, while maintaining the Bank rate unchanged at 0.25 percent at its monetary policy meeting held today.
The yield on the benchmark 10-year gilts, slumped 4 basis points to 1.19 percent, the super-long 30-year bond yields hovered around 1.87 percent and the yield on the short-term 2-year plunged 2-1/2 basis points to 0.26 percent by 11:00 GMT.
The pound has plunged after the Bank of England decided to leave interest rates at 0.25pc and slash growth forecasts Only two members voted for a rise, one less than June's vote The central slashed its growth forecast for 2017 from 1.9 percent to 1.7 percent.
The central bank has warned households to expect interest rates to rise over the next year but also predicted living standards will be squeezed by higher inflation and sluggish wage growth. The Bank’s rate-setting committee voted by 6-2 to leave official borrowing costs at their all-time low of 0.25 percent, according to minutes from their meeting released on Thursday.
Meanwhile, the FTSE 100 jumped 0.62 percent to 7,451.00 by 13:20 GMT, while at 11:00GMT, the FxWirePro's Hourly Pound Strength Index remained highly bullish at 107.91 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
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