Gilts

Gilt futures rallied amid expectations that the Bank of England would expand its £125 billion quantitive easing programme today. Weak equity markets also encouraged buying. The September gilt future rose 64p to £118.80. Ten-year gilt yields were down seven basis points at 3.61 per cent.

Rumour of the day

Bloomsbury, the Harry Potter publisher, rose ½p to 128p. It experienced unusually strong volume on Tuesday amid talk that Pearson, the owner of Penguin, a rival, was considering a bid. Pearson could afford Bloomsbury’s diminished £100 million value, but sources believe that it has other acquisition targets for its £580 million cash pile.

Deal of the day

Virinder Nohria, a non-executive director at Allergy Therapeutics, bought 456,949 shares at 13p each. Allergy, unchanged at 12¾p, is developing Pollinex Quattro, a hay-fever inoculation. There are hopes that a delay in approval in the United States may be resolved this year, which would make the company a bid target.

Bet of the day

The Bank of England is expected to decide to hold interest rates at 0.5 per cent today. So far, so steady: more exciting is the future of its quantitative-easing programme, which will have an effect on the price of the sterling-dollar exchange rate. Capital Spreads quotes a spot price for sterling-dollars of $1.6020-$1.6023.

Tiddler to watch

May Gurney, the contractor, fell 7p to 160½p amid profit-taking after Tuesday’s in-line trading update. Brewin Dolphin reiterated “buy” advice, with a 230p target. It said that there was a strong pipeline of contracts while most of its existing business was for long-term maintenance work, making it resilient to public sector cutbacks.

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