Gilts are trading mixed, with the......>

GILT SUMMARY: Gilts are trading mixed, with the 2s/10s part of the yield curve

slightly flatter following better than expected UK Service PMI and as markets

look ahead to key Bank of England monetary policy decision and release of MPC

minutes and Aug Quarterly Inflation report.

- 2-yr Gilt yield is +0.3bp at 0.282%, 5-yr +0.5bp at 0.611%, 10-yr -0.2bp at

1.234% and 30-yr +0.3bp at 1.868% according to Tradeweb.

- UK Service PMI came in at 53.8 modestly higher than June's 53.4 and beating

MNi median forecast of 53.5. However the detail of the report highlighted the

activity pick up only slightly from 4-month low and business optimism remained

subdued. Overall the three PMI's point to the UK economy rising "just over 0.3%

q/q putting the country on course for another steady but sluggish expansion" in

Q3, Chris Williamson, Chief Business Economist at IHS Markit said.

- Attention now turns to BoE monetary policy decision, MPC minutes, QIR and

Governor Carney's press conference from 1200BST. Consensus is for the Bank to

vote 6-2 to keep rates on hold with risk seen of a tighter 5-3 vote. Risk also

of BoE ending TFS and there being a hawkish tone to the minutes.