THE surprise revelation that two members of the Monetary Policy Committee voted to cut rates at this month’s meeting sent gilts sharply higher across the board.
Given that May’s meeting of the Bank of England’s rate-setting body produced an 8-1 split — with the dissenter in favour of an interest rate rise — yesterday’s MPC minutes showed that the discussion of a quarter-point cut was seen as a significant turnaround. Further, doves were heartened to learn that one of the minority voters was Charlie Bean, the Bank’s chief economist.
The September gilt future rallied on the morning publication of the MPC minutes and maintained its best levels through to the close, settling 78p better at £113.47. Short-dated maturities did best in yield terms, with Treasury 4¾ per cent 2010 up 50p at £102.59, and Treasury 6 per cent 2028 109p higher at £125.38.
Among sterling bond issues, Trafford Centre sold two asset-backed floating rate notes through Royal Bank of Scotland.