LONDON: British government bond prices rose modestly on Wednesday as investors digested comments from Prime Minister David Cameron's speech on Europe, ahead of the latest Bank of England minutes.
Prime Minister David Cameron promised to give Britons a straight referendum choice on whether to stay in the European Union or leave, provided he wins an election in 2015.
At 0847 GMT, the March gilt future was 13 ticks higher at 117.06, underperforming the equivalent Bund future which was 30 ticks higher.
Investors were also focused on a speech from Bank of England Governor Mervyn King on Tuesday, who said the Bank's inflation-targeting remit needs to be fine-tuned but should not undergo fundamental change.
"King's speech offered few genuinely fresh insights," said Monument Securities strategist Marc Ostwald.
"While he also suggested that the Monetary Policy Committee was willing to consider more quantitative easing, it was equally clear that they are currently in no hurry to do more, and that is likely to be the tenor of today's MPC minutes," he added.
Strategists expect the minutes from the Bank of England's last policy meeting, at 0930 GMT, to repeat last month's pattern of voting, to keep the bank rate at 0.5 percent and 8-1 vote to hold the stock of asset purchases at 375 billion pounds ($595.03 billion).
"MPC minutes for the Jan meeting hold little significance after King's speech yesterday and are likely to suggest a similar voting pattern as the Dec meeting, but there is a risk that Miles may have retreated from his call for further QE in light of the clear signs of improvement in availability of credit," said Lloyds strategists.
Ten-year gilt yields fell 1 basis point to 2.01 percent, while their spread with Bund yields was 2 basis points wider at 46 basis points.
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