It is determined by several factors including interest rate
expectations, the amount of debt issuance in the pipeline, the
inflation outlook and creditworthiness.
Many economists think Britain is more prone to higher
inflation and weak economic growth than its peers.
It was a similar story on Friday for the gap between British
and U.S. bond yields, with the 10-year spread widening to 34 basis points - on track for the highest weekly
close since October 2011, again excluding the Truss government.
U.S. Federal Reserve Chair Jerome Powell said on
Wednesday that the Fed might be at the end of its
rate-tightening cycle - a contrast to the Bank of England, which
financial markets expect will keep raising rates in the months
ahead.
(Reporting by Andy Bruce; editing by David Milliken)
LONDON, May 5 (Reuters) - The gaps in yield between
British 10-year government bonds and those of comparable German
and U.S. bonds on Friday looked on track to finish the week at
their highest levels for several years - excluding the
premiership of Liz Truss.
The spread between 10-year British and German bonds stood at 147 basis points (bps) on Friday as of
0910 GMT, up around a basis point from Thursday.
While the spread struck an intraday high of almost 149 bps
on Thursday, its present level would mark the highest weekly
close seen in eight years, excluding the market turmoil
associated with the short-lived Truss administration in
September and October 2022.
The yield spread represents the additional premium that
investors demand in order to hold the debt of a particular
country.
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