EGB/GILT: BOE Faces Criticism On Inflation

Gilts and EGBs have broadly traded higher this morning alongside uneven trading in equities.

• Gilts have firmed with cash yields 2bp lower across the curve.
• Bunds have slightly lagged on the day with yields broadly 1bp lower.
• It is a similar story for OATs where the curve is 1bp flatter on the day.
• The Lords Economic Affairs Committee has argued that the Bank of England has failed to justify its QE policy and needs to provide more justification for believing that the recent surge in inflation is temporary. This follows on the heels of comments yesterday from the BoE's Saunders who suggested that the central bank could soon have to curtail the pandemic stimulus.
• The UK's Chief Medical Officer, Chris Whitty, has warned that the UK is "not out of the woods yet" at a time when the government is moving forward with reopening the economy alongside rising infections.
• Supply this morning came from the UK (T-Bills, GBP3.0bn).