LONDON: Gilt futures fell in step with Bunds on Thursday, after closing at a three-week high the previous session, as traders awaited the final reading of Britain's second-quarter gross domestic product.
The release, due at 0830 GMT, was expected to confirm a 0.5 percent quarterly decline in GDP, though some economists were betting on an upward revision.
Nonetheless, Lloyds strategists said an upward revision was likely to be trumped by safe-haven flows into gilts.
"All else equal, gilts should keep benefiting from 'flight to safety', although they may be penalised in relative terms following yesterday's outperformance versus US Treasuries," they said in a note.
At 0759 GMT December gilt futures were 20 ticks down at 120.63, having settled at 120.83 - the highest close since Sept. 5 - on Wednesday, boosted by Spain's reluctance to seek a bailout and new worries about global growth.
Equivalent German government bond futures were 18 ticks lower.
Spain will announce a series of economic reforms and a tight 2013 budget later on Thursday, aiming to avoid the political humiliation of having Brussels impose conditions on a request for an international bailout.
Yields on 10-year gilts rose 1 basis point to 1.708 percent, with the spread over Bunds steady at 24 basis points.
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