LONDON: UK gilts were steady in the absence of major domestic events on Monday, with concerns that aid for European banks will not ease Spain's strained national debt supporting demand for top-rated government bonds.
Bank of England Governor Mervyn King will deliver a speech on Tuesday and Britain will release third-quarter GDP data on Thursday, which economists expect to show that the country emerged from nine months of recession.
The UK Debt Management Office will also launch via syndication a new 2044 gilt with a 3.25 percent coupon this week.
Some of the past month's economic data and newsflow have thrown doubt on whether the Bank of England will extend its quantitative easing programme of bond-buying beyond this month.
"In the UK, the data releases and surveys will determine the continuation of QE at the November MPC meeting," Lloyds strategists wrote in a note.
At 0740 GMT, the December gilt future was 6 ticks lower at 118.69, while the equivalent Bund future was 1 tick up.
German Chancellor Angela Merkel raised new hurdles on Friday to using the euro zone's rescue fund to inject capital directly into ailing banks from next year, dashing Spain's hopes of soon removing the cost from its strained national debt.
"The long-standing expectations that Spain will ask for assistance remain intact despite the recent significant improvement in Spanish yields," Lloyds said.
Ten-year gilt yields rose 2 basis points to 1.898 percent, with their spread over Bunds 1 basis point wider at 30 basis points.
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