U.K. government bonds rose, with 10- year yields falling from the highest level since April, after a report showing euro-area gross domestic product contracted last quarter spurred demand for safer assets. Five-year gilts reversed earlier losses after the government sold 4 billion pounds ($6.2 billion) of the securities. The pound strengthened for the first time in four days against the euro. The difference in yields between five- and 10-year gilts widened to the most since December 2011. “The euro-region GDP results were bad which has helped fixed-income assets this morning,� said Sam Hill, a fixed- income strategist at Royal Bank of Canada in London. “The auction was pretty solid. Overall it’s a good result.� The 10-year gilt yield fell one basis point, or 0.01 percentage point, to 2.20 percent at 11:42 a.m. London time after climbing to 2.27 percent, the highest level since April 2. The 1.75 percent bond due in September 2022 gained 0.1, or 1 pound per 1,000-pound face amount, to 96.165. The five-year yield dropped two basis points to 0.98 percent after rising to 1.04 percent. The pound gained 0.7 percent to 85.92 pence per euro and dropped 0.2 percent to $1.5516. 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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