Speculation about additional monetary easing from the Bank of England also was prompted by results of the annual inflation rate dropping to 4.2 percent from 4.8 percent in November. But Spain's debt auction on Tuesday saw bond yields slide lower than the most recent auction, which was last month.
"The yields where they are now don't reflect the real economy, but they reflect the fact that the U.K. is seen as a safe haven and also all the quantitative easing being done," investment manager Luke Hickmore with Scottish Widows Investment Partnership in Edinburgh told the news service. "In the longer-term, as these things start washing out, the yield won't be 2 percent. It will be more like 3 or 4 percent at least."
The average yield of 2.049 percent resulted from Tuesday's sale, almost half the 4.05 percent bond yield during the auction in the middle of this past December.
The U.K. runs the risk of a break-up should Scotland vote to pull away in a referendum battle with England, according to Radio Netherlands Worldwide.
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