UK government bonds soared for a second day yesterday after the Bank of England unveiled plans to buy billions of pounds of assets to kickstart the economy. Fund managers and speculators rushed to buy government bonds, known as gilts, driving up prices. Benchmark 10-year gilt prices saw their biggest one-day jump in 17 years yesterday. The central bank will create new money to buy £ 75 bn of assets, mainly gilts, at a series of auctions over the next three months. Another £ 75 bn could follow. Many economists believe the unprecedented measures should be enough eventually to lift the economy out of its worst slump since the 1930s. John Wraith of RBC Capital Markets expects the rally in the gilt market to continue for some time. A lot of people will now want to own the assumption that prices will keep on rising,' he said.
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