LONDON: British government bond prices fell after weak demand at the sale of 3.25 billion pounds ($4.95 billion) of 10-year gilts on Tuesday, pushing 10-year yields to their highest since May 22.
The UK Debt Management Office said investors bid for 1.19 times the 3.25 billion pounds of 2 percent 2025 gilts available, matching similarly weak demand at a sale on April 8, which showed the lowest investor appetite since March 2009.
Gilt futures fell to a session low and 10-year gilt yields rose more than 8 basis points on the day to peak at 1.937 percent at 0951 GMT.
Ten-year gilts' yield spread over Bunds widened by around 3 basis points after the auction result was published to touch 133 basis points.
Before the sale, Citi gilts strategist Jamie Searle had written in a note to clients that the auction had "clear negatives" as the gilt was expensive compared to others, though he expected other factors to offset this.
Gilt prices had also been put under pressure by Bank of England data showing a much bigger than expected jump in mortgage approvals in April.
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