Borrowing costs on U.K. government debt declined across all maturities on Friday after the Conservative Party looked set to win the general election. The yield on 10-year gilts fell 7 basis points to 1.87%, according to electronic trading platform Tradeweb. Yields were trading above 2% in the run-up to the election held on Thursday. Opinion polls had showed a tight race with a coalition government likely, but by midmorning Friday, Prime Minister David Cameron's Conservatives were on course for a majority. The relief rally in U.K. government debt -- when prices rise yield fall -- was likely to be short-lived, however, according to Morgan Stanley analysts. "Gilt yields should rise and the curve steepen, particularly as supply picks up in the next six months," they said in a note out Friday morning.
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