UK equities shrug off downgrade but gilt yields climb

The yield on the benchmark ten-year gilt rose 0.04bps to 2.16%, as investors reacted to the move by the credit ratings agency. However, while yields rose, they remain well below the year high of 2.44% seen last March. Commentators noted that with a central bank willing to undertake more quantitative easing (QE), there is little risk of gilt markets selling-off hugely as a result of the downgrade. The real pain will come in the forex markets instead. Sterling fell to a two-year low against the dollar on Friday evening after the downgrade announcement, dropping through $1.52, and tha...