November 21, 2018 / 2:35 PM / 25 days ago

PIMCO bond chief Balls said risk of hard Brexit, early UK elections low

LONDON, Nov 21 (Reuters) - The possibility of a hard Brexit or early elections in Britain are fairly low, PIMCO’s chief investment officer for global fixed income Andrew Balls said on Wednesday.

“The risk of hard Brexit is low, and the risk of early elections is fairly low as that is the last thing the Conservatives want,” Balls said at a conference in London, referring to the UK’s ruling party.

“As long as a chaotic Brexit is avoided, this is pretty stable in terms of the UK outlook. A surprise election and a Labour government would mean a lot of uncertainty about the course of that government.”

Balls added that UK government bond yields looked too low and that he was underweight UK interest rate risk.

British gilt yields fell sharply last week after a draft Brexit deal.

Balls added that while Greece — which exited its bailout in August — is stable, concern about the country would grow if Italy’s crisis worsened. (Reporting by Virginia Furness; Writing by Dhara Ranasinghe; Editing by Abhinav Ramnarayan)

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