A five-year squeeze on living standards is coming to an end, providing a boost for Prime Minister David Cameron as he battles opposition claims that ordinary Britons are facing a “cost of living crisis.”
Portuguese bonds dropped and German 10-year government debt yields reached a 20-month high after the Iberian nation sought a bailout and investors bet the European Central Bank will raise interest rates today.
Irish bonds tumbled for a 10th consecutive day and the extra yield investors demand to hold the debt instead of benchmark German bunds reached a record on concern the nation is struggling to redress its budget deficit.
The euro area’s higher-yielding government bonds are emerging as a haven from emerging-market turmoil as the prospect of greater stimulus from the European Central Bank underpins demand for the securities.
The two-year Treasury yield was near the lowest in six weeks as stocks declined and accelerating Chinese economic growth fuelled concern the government will raise interest rates further to calm inflation.