LONDON, June 6 (Reuters) - Yields on British government bonds rose on Wednesday, extending a week-long rise back towards their levels before Italy’s political crisis in late May.
Mirroring moves in other European markets, the yield on 10-year gilts hit a high of 1.377 percent, up from last week’s low of 1.107 but still below their levels of around 1.5 percent in mid-May.
Yields on other maturities of British government debt also continued to rise.
John Wraith, a fixed-income strategist at UBS, said gilts were following German bunds which fell in price sharply on Wednesday — pushing up their yields — after the European Central Bank’s chief economist Peter Praet said the ECB would debate next week whether to end bond purchases this year.
“I think today it’s very much a case of follow-the-leader,” Wraith said.
Domestic factors had provided some upward pressure on gilt yields recently, he said, citing recent data suggesting that Britain’s economy has recovered from a very weak start to the year and reviving some expectations of a Bank of England interest rate hike in August. (Writing by William Schomberg, Editing by William Maclean)