Budget 2011: Gilts climb and pound falls on UK growth cut

The yield on 10-year government bonds was five basis points lower at 3.55% at 12:44, while the two-year note also saw its yield drop three basis points to 1.26%. Gilts had already risen this morning before the Budget announcement, with the yield on 10-year notes falling two basis points to 3.58% as it was revealed only three members of the MPC voted for interest rate rises. Meanwhile, the pound declined further as the forecast for UK growth disappointed against the US dollar, dropping 0.8% to $1.6231 as of 12:48, and 0.4% versus the euro to 87.06. Sterling had already fallen this m...