Gilts plunge after Fed signals fewer bond purchases

LONDON: British government bonds tumbled in early trade, lifting yields to a 15-month high, after the Federal Reserve signalled it would likely slow the pace of its bond-buying stimulus later this year.

Ten-year gilts yields jumped 16 basis points to 2.3 percent, their highest since March 2012 and on track for their biggest one-day jump this year.

September gilt futures sank 170 ticks to hit a contract low of 113.15.

Fed chief Ben Bernanke's comments, made after markets closed on Wednesday, knocked equity and bond markets around the world. US Treasury yields also hit a 15-month high and yields on euro zone government bonds saw a similar leap.