Gilts Drop as EU Reaches Agreement on Greece’s Deficit Crisis - by Keith Jenkins and Lukanyo Mnyanda

U.K. bonds fell for the third day in four after European Union officials reached an accord to deal with Greece’s deficit crisis, sapping demand for the safety of government debt.

The losses pushed the 10-year yield near the highest level in three weeks as the FTSE 100 index of stocks rallied 0.6 percent. Euro region leaders stopped short of offering specific measures to help Greece reduce its budget deficit, the largest in the 16-nation euro area. Gilts also fell as the U.K. sold inflation-linked securities maturing in 2022.

“We’re extending declines,” said John Wraith, a fixed- income strategist at Bank of America Corp. in London. “It’s an EU announcement and an EU support program, and there is some speculation that the U.K. may participate.”

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