UK gilts remain mixed amid persisting Brexit uncertainties

The United Kingdom’s gilts remained during European trading hours Tuesday amid a slew of external uncertainties concerning Brexit; the week shall end by UK Brexit Secretary Barclay meeting EU Chief Negotiator Barnier in Brussels, although no solid solution is expected to be seen.

The yield on the benchmark 10-year gilts, suffered nearly 1-1/2 basis points to 0.507 percent, the 30-year yield hovered around 0.955 percent while the yield on the short-term 2-year slumped nearly 3 basis points to 0.405 percent by 10:40GMT.

But while persistent political uncertainty will be damaging to the UK economy, the latest GfK consumer survey indicated a surprising pickup in confidence this month. In particular, the headline index rose 2pts in September to -12, nevertheless still comfortably within the recent weak range, 3pts lower than a year earlier and 11pts lower than the pre-referendum level, Daiwa Capital Markets reported.

But while there were modest improvements across the survey components, they still continued to suggest that consumers feel less than positive about the current and future economic situation – indeed the survey’s index for economic conditions over the coming twelve months was still one of the lowest since the Global Financial Crisis, the report added.

While the headline index remains some off the record lows seen during this period, overall today’s survey suggests little substantive improvement in household confidence. And with the component measuring consumers’ willingness to make major purchases still below its level a year ago, consumption growth is expected to be more subdued the longer political uncertainty persists, Daiwa further noted in the report.

Meanwhile, the FTSE 100 traded surged a little over 1 percent to trade at 7,430.55 by 10:40GMT.