UK bond yield drops to record as investors seek safer assets
LONDON: UK government bonds advanced, sending the 10-year gilt yield to the lowest on record, as global stock markets resumed declines and boosted demand for the relative safety of sovereign debt. Gains in gilts came after U.S. Federal Reserve Chair Janet Yellen added to caution in the markets saying Wednesday that weakening stock prices posed a risk to the economy. Global equity markets have lost $7.6 trillion this year. U.K. policy makers voted unanimously last week to hold interest rates at a record low as tumbling oil prices diminish the outlook for price growth. "It's difficult to see what breaks the trend near-term," said Jason Simpson, a strategist at Societe Generale SA in London. "Oil is down, equities are softer, so from that perspective it may be capitulation trades.