LONDON: British 30-year government bond yields hit their highest level in almost a month on Wednesday, driven higher by more speculation about the prospect of Scottish independence and the possibility of interest rate hikes early next year.
The 30-year gilt yield peaked at 3.197 percent, its highest level since Aug. 13, shortly after Bank of England Governor Mark Carney repeated to lawmakers that the point at which interest rates will need to rise had moved closer.
At 1446 GMT it had eased back to 3.190 percent, up around 4 basis points on the day and making the 30-year gilt the weakest performer among British government bond maturities.
On Tuesday, Carney said the BoE may start to raise rates from record low levels next spring if the labour market continues to recover.
The British yield curve has steepened this week as polls have suggested the referendum on Scottish independence from the rest of the United Kingdom, due to take place next Thursday, is too close to call.
While 30-year bond yields rose around 4 basis points on Wednesday as investors sought to reduce long-term exposure to British debt, the 2-year gilt yield was last up around 1 basis point.
The battered pound recovered from a 10-month low against the dollar and a three-month trough against the euro on Wednesday as a week-long sell-off took a breather.
The spread between the British 10-year gilt and equivalent German Bund was last around 150 basis points, up around 2 basis points on the day, having touched a near two-week low of 146.9 basis points early in the session.
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