LONDON: The premium that 10-year British government bonds offer over the equivalent German debt rose to its highest level in a month on Friday, after a fresh sign that the European Central Bank was moving towards the purchase of government bonds.
The yield spread between the benchmark 10-year gilt and its Bund counterpart peaked at 129.5 basis points, its highest level since Nov. 21, according to Reuters data.
At 1237 GMT it stood at 129 basis points -- up almost 4 basis points on the day.
Government bond yields in the euro zone fell after Reuters reported that European Central Bank officials were considering ways to ensure weaker countries bear more of the risk and cost of sovereign debt purchases.
Analysts said the story helped to reinforce bets that some form of ECB quantitative easing was imminent.
By contrast, British gilt yields rose moderately, tracking moves in US Treasuries.
The 10-year gilt yield briefly hit its highest level in a week at 1.925 percent, before settling back to 1.89 percent -- up 2 basis points on the day.
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