WEAKER than expected UK retail sales figures gave a boost to gilts amid renewed hope that the fresh data would prompt the Bank of England to cut interest rates.
Short sterling contracts jumped across the board after the CBI’s monthly distributive trades survey showed a June retail sales balance of minus 19, its lowest level since the survey began 22 years ago.
Gilt strategists said that if official retail figures confirmed the CBI data, then the BoE could cut rates at least once this year from their current 4.75 per cent level.
September short sterling settled up 2p at £95.40, while the December contract gained a similar amount to £95.63. The December contract has firmed 30p during the past two weeks.
The September gilt future recovered from Tuesday’s falls to close 13p firmer at £113.80. Treasury 6 per cent 2028 was also firmer, up 10p to £126.05, but its Treasury 4½ per cent 2010 counterpart extended recent losses by dipping another 16p to £102.54.