Cost of borrowing
over 10 years for the British government has risen above 3% for the first time
since July 2011.
It is a sign that
the financial markets believe that efforts to boost the US and UK economies
will be withdrawn sooner than thought.
On Thursday, a
report showed that activity in the US service sector hit the highest level
since December 2005.
That follows data
on Wednesday showing UK service sector activity running at a six-year high.
Yields on 10-year
UK bonds - known as gilts - touched 3.005%.
Last month, Bank
of England governor Mark Carney said the central bank would not consider
raising interest rates until the unemployment rate fell below 7%, which he said
could take three years.
The BoE is
injecting £375bn of monetary stimulus into the UK economy.
But many
economists believe that recent data shows the economic recovery is
accelerating, which may force Carney to take action sooner.
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