U.K. government bonds declined for a third day after the Bank of England said policy makers were split on the need for more stimulus as they approach a decision next month on whether to extend their bond-purchase program. The pound climbed to an eight-day high against the dollar after data showed U.K. jobless claims unexpectedly fell in September and a wider measure of unemployment dropped to the lowest rate in more than a year. Ten-year gilt yields climbed to the most in almost a month as investors pared back bets that policy makers will increase their asset-buying target at the next meeting on Nov. 7-8. The current round of bond purchases finishes next month. “It highlights that there are some significant differences about the best path to follow with regard to more stimulus,� said John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London. “There had been some expectations of them doing more and those have to be tempered,� which is pressuring gilts, he said. Ten-year gilt yields climbed seven basis points, or 0.07 percentage point, to 1.89 percent at 10:35 a.m. London time, after reaching 1.89 percent, after touching 1.90 percent, the most since Sept. 19. They breached the 200-day moving average at 1.878 percent for the first time since Sept. 18. The 1.75 percent security maturing in September 2022 fell 0.64, or 6.4 pounds per 1,000-pound ($1,615) face amount, to 98.72. Two-year yields climbed one basis point to 0.27 percent. Considerable Scope “Some members felt that there was considerable scope for asset purchases to provide further stimulus,� the central bank said in the minutes of the Monetary Policy Committee’s Oct. 3-4 meeting, published today in London. Policy makers voted 9-0 to keep the bond-purchase target at 375 billion pounds, according to the minutes. They were also unanimous in holding the benchmark interest rate at a record low of 0.5 percent. The pound rose 0.3 percent to $1.6160, the most since Oct. 5. It fell 0.2 percent to 81.17 pence per euro, after reaching 81.38 pence, the weakest level since June 15. Jobless-benefit claims fell 4,000 from August to 1.57 million, the Office for National Statistics said today in London. The median of 27 estimates in a Bloomberg News Survey was for no change. The jobless total measured by International Labor Organization methods declined to 7.9 percent between June and August. The pound has climbed 0.9 percent in the past six months, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The euro fell 0.8 percent and the dollar dropped 0.7 percent. Gilts returned 2.4 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bonds gained 2.8 percent and U.S. Treasuries earned 1.9 percent. To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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