UK gilts narrow yield premium over bunds as economy shows slowdown signs

LONDON, May 21 (Reuters) - ​The yield ⁠premium of ​10-year gilts over German debt tightened to ​its narrowest ‌in a month on Thursday as ⁠signs of weakness in ⁠Britain's economy tempered ​bets on the Bank of England raising interest rates.

The 10-year gilt/Bund ​spread ‌stood at 187 basis points, its lowest since April 21.

Ten-year gilt yields were down about ​4 basis points at 4.958% at ‌0900 GMT when equivalent German Bunds were flat.

Earlier ‌on Thursday, a survey showed British companies were suffering their most widespread ​drop in activity in over a year due ‌to the economic fallout from the Iran war and political uncertainty at ⁠home.

Investors ⁠were pricing around ‌44 basis points of BoE monetary policy tightening ​by ​the end of ‌the year, equivalent to less than two quarter-point hikes.