UK bond market resilient to small credit rating downgrade

LONDON: British government debt's appeal to international investors is likely to prove resilient to a small further downgrade by credit ratings agencies, but a loss of 'AA' status could prompt a reassessment, the UK Debt Management Office said on Wednesday.

DMO chief executive Robert Stheeman told lawmakers that the market response to a no-deal Brexit was hard to predict as it would depend heavily on whether the Bank of England loosened policy, which would boost prices of short-dated gilts.

Overall the gilt market reaction had been "uncannily quiet" to Brexit headlines, in contrast to sharper moves in sterling, he added.

Standard & Poor's and Fitch Ratings both rate Britain as 'AA' while Moody's rates Britain at Aa2.