By Lukanyo Mnyanda April 14 (Bloomberg) -- U.K. government bonds declined after gains in stock markets sapped demand for the relative safety of fixed income as the economic recovery gathers pace. The losses left the 10-year yield within 3 basis points of the highest since March 16 as the MSCI World Index of stocks rose 0.4 percent. JPMorgan Chase & Co., the second-biggest U.S. bank by assets, said first-quarter earnings rose 55 percent, beating analyst estimates. “Equity sentiment is something that will drive fixed- income markets,” said Michael Markovic, a senior fixed-income strategist at Credit Suisse Group AG in Zurich. “In general, yields are up in all markets.” The yield on the 10-year gilt rose 3 basis points to 4.05 percent as of 12:53 p.m. in London. The 3.75 percent security due September 2019 lost 0.26, or 2.6 pounds per 1,000-pound ($1,542) face amount, to 97.7. The yield climbed to 4.08 percent on April 12. Two-year yields rose 3 basis points to 1.18 percent. The pound gained 0.3 percent to $1.5431. It climbed 0.4 percent to 88.18 pence per euro, after declining the past three days. Britain’s benchmark FTSE 100 Index climbed to the highest level since June 2008, buoyed by a rebound in mining shares. A report tomorrow may show consumer confidence rose last month, according to a Bloomberg survey before Nationwide Building Society’s report tomorrow. Job Vacancies Job vacancies in London’s financial district rose 120 percent in the first quarter compared with the year-earlier period, the Financial Times reported, citing Astbury Marsden, a financial recruitment specialist. JPMorgan’s net income climbed to $3.33 billion from $2.14 billion in the same period a year earlier on record fixed-income trading revenue and a reduction in provisions for credit losses, the New York-based bank said today in a statement. Campaign promises by British Prime Minister Gordon Brown and his Conservative challenger David Cameron to tackle a record budget deficit may be enough to spare the U.K. from the market rout that battered Greece, say economists at banks including UBS AG and JPMorgan Chase & Co. Gilts have underperformed their German counterparts and the pound has lost 4.6 percent against the dollar this year partly on speculation that next month’s elections won’t produce a government strong enough to cut the nation’s budget deficit of about 12 percent of gross domestic product. The currency has gained 2.5 percent against the dollar in the past month, buoyed by data signaling the economic recovery may be sustained. Gross domestic product grew 0.4 percent in the first quarter, the National Institute of Economic and Social Research said April 8. U.K. government bonds made 0.7 percent this year, compared with a 2.6 percent return for German securities, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

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