The UK gilts plunged Thursday as investors cashed in profits after relishing a long week rally. Also, the 10-year bond yields broke to new lows below the 0.60 percent mark, and 0.50 percent is possibly on the cards.
The yield on the benchmark 10-year gilts increased 1 basis point to 0.542 percent and the yield on short-long 2-year bond climbed 4 basis points to 0.140 percent by 10:10 GMT.
The Bank of England Monetary Policy Committee member McCafferty said the BoE should follow a gradual approach and it is difficult to determine the right amount of stimulus.
He further said that if the economy proves to have turned down in line with initial survey signals, he believes more easing likely to be required. Bank rate can be cut further, closer to zero, and quantitative easing can be stepped up, he added.
According to Reuters, the Bank of England fell 52 million pounds ($68 million) short of its target to buy more than a billion pounds of long-dated government debt on Tuesday, an early slip-up for one of its latest measures to stimulate Britain's economy.
For the first time since it started buying government bonds to boost Britain's economy in 2009, the central bank failed to find enough willing sellers to meet its purchase target, they added.
Lastly, markets will remain keen to focus on the next week’s economic data, highlighted by CPI, PPI, employment and retail sales.
Meanwhile, the FTSE 100 traded 0.26 percent lower at 6,848.90 by 10:20 GMT.


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