LONDON: British government bonds dipped early on Thursday ahead of growth data that will offer a snapshot of the economy's health and further clues on whether the Bank of England will opt for more stimulus.
At 0750 GMT, the December gilt future was 37 ticks lower at 118.70, underperforming the equivalent Bund.
Economists polled by Reuters expect the third-quarter GDP data due at 0830 GMT to show quarterly growth of 0.6 percent, following three consecutive quarters of contraction.
A strong rebound may further dampen expectations the UK central bank will opt to buy more government bonds after it completes its current 50 billion pound round of quantitative easing in November.
"We think gilts are going to underperform as they did yesterday," John Wraith, fixed-income strategist at BofA Merrill Lynch Global Research, said.
"QE has been an important factor in sustaining gilt yields as low as they've been."
Stronger signs that the bank's ratesetters would put QE on hold or stop it altogether could "undermine gilts, particularly in the 10- to 20-year area of the curve," Wraith said.
Ten-year gilt yields rose 5 basis points to 1.900 percent, with their spread over Bunds steady at 29 points.
Two of the nine BoE policymakers struck a note of confidence on the economy in interviews with newspapers.
Paul Fisher and Charlie Bean a new initiative by the bank's to get credit flowing through the economy was showing promising signs.
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