S&P reduces UK's credit rating

LONDON: UK corporate bonds fell the most in six weeks and the cost of hedging against losses on government debt jumped, after Standard & Poor's yesterday cut the outlook on the nation's AAA credit rating to "negative".

The Markit iBoxx Sterling Non-Financials index of bonds sold by UK companies fell as much as 0.9 percent, the most since April 2, to a one-week low of 94.24, and was at 94.75 as of 11:26 am in London.

Credit-default swaps tied to UK government bonds rose 5 basis points to 78.5, Deutsche Bank AG prices show, signaling a drop in perceptions of credit quality.