Gilt yields climb after UK GDP fall

Gilts are seeing prices fall and yields climb after the worse than feared decline in the UK economy was revealed this morning.

Following the 0.2% contraction in the economy - a more severe decline than the 0.1% slide analysts had pencilled in - gilt yields climbed.

After the Office for National Statistics released its GDP figures to the market, bid yields on the benchmark 10-year gilt moved from 2.151% to 2.174%, before settling at 2.159% (according to data from Tradeweb).

Commentators said the GDP figure is a sign of things to come this year, with Capital Economics' chief UK economist Vicky Redwood warning the economy is likely to shrink throughout most of the year.

Redwood added she expects to see a further £75bn of quantitative easing announced next month to tackle the slowdown.

Sterling also dropped against major currencies after the release, off $0.0046 against the greenback to $1.5581, and moving marginally lower against the euro to €1.20.