By Harry Robertson and Yoruk Bahceli
LONDON (Reuters) – PIMCO and other major investors said they were staying in the market for British government bonds despite the recent turmoil, throwing finance minister Rachel Reeves a potential lifeline as she tries to quell a multi-day sell-off in UK debt.
Asset managers said the sharp rise in UK borrowing costs in recent days is likely to force Reeves to cut spending or raise taxes, weighing on UK growth and raising the likelihood of deeper-than-expected Bank of England rate cuts, which could soothe markets.
Britain’s benchmark 10-year government bond yield on Thursday touched 4.925% , its highest since 2008, surging more than 30 basis points in three days. Meanwhile, the pound slid to its lowest level since November 2023 at $1.224.
Yet the sell-off eased later on Thursday and 10-year and 30-year bond yields were last flat on the day. Yields rise as prices fall and vice versa.
PIMCO, one of…
