Watch ‘em go.

Peripheral eurozone bond yields are plumbing fresh record lows today as the government debt rally is fired up by expectations of further monetary easing in the UK, writes Mehreen Khan.

Ireland is the latest to see its 10-year bond yield tumble to a new record low, shedding 1 basis point (0.01 percentage point) to hit 0.374 per cent on Tuesday. The former “Celtic Tiger” saw yields collapse in the wake of the Brexit vote as investors began to price in an opening of the monetary taps by the Bank of England.

With the BoE duly delivering on the stimulus injection, and promising more ahead, Irish bonds have joined Spain where yields dipped below 1 per cent for the first time ever on Monday and are continuing their descent. Spanish 10-year paper is yielding 0.976 per cent at publication time, declining a further 2 basis points on Tuesday.

Italy, the eurozone’s third largest economy, has also joined the party. Despite troubles in its flailing banking system, Italian yields look set to fall below the 1 per cent mark, dropping to 1.12 per cent at publication time. Investors seem to be shrugging off a move by ratings agency DBRS to place the country on credit watch last week.

The peripheral bond rally comes as Britain’s 10-year gilt yields slipped to their lowest on record today. Falling yields reflect lower expected economic growth and have been pushed down by the expectation of further central bank action to counteract any adverse economic effects from the EU referendum.

Oil prices have also resumed their slide in recent weeks, raising further doubts over central banks hitting their inflation targets in a world of slumping energy costs. The total number of global rate cuts has hit 666 since the collapse of Lehman Brothers in 2008.

Ian McCafferty, a BoE rate-setter and traditionally one of its most hawkish members, said he would join his fellow eight members in voting for another rate cut should the economy show further signs of deterioration. Policymakers cut Bank rate to a 300-year low of 0.25 percentage points last week.

“If the economy proves to have turned down in line with the initial survey signals, I believe that more easing is likely to be required, but that can easily be delivered in coming months”, Mr McCafferty wrote in The Times today.

“Bank rate can be cut further, closer to zero, and quantitative easing can be stepped up”, he said.

Chart courtesy of Bloomberg

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