Gilts tumble as PBR intensifies downgrade fears - papers

Gilt prices fell sharply yesterday as investors began to digest the Government's pre-Budget report and fears that Britain's credit rating will be downgraded intensified.

Yields on 10-year gilts jumped 14 basis points by close of trading as confidence in Government debt spiralled downwards, dragging prices down with it, the Independent reports. The gilts market is also pricing in fears Alistair Darling's forecasts for recovery are over-optimistic, and his spending cuts too little, to manage the huge public deficit. Further problems for the gilts market lie in the Chancellor's hazy promise to halve annual borrowing to 5.5% of GDP in four years with little detail about where the extra money will be found instead. Full story...