PIMCO says UK is largest overweight in global bond fund

LONDON, April 2 (Reuters) - The UK is PIMCO's largest overweight position in its global bond fund because the Bank of England is likely to cut rates more than markets anticipate, global fixed income CIO Andrew Balls said on Wednesday.

UK government bonds have stabilised after a sharp selloff in January triggered in part by concerns about the country's rising debt levels.

"My thinking is that the level of terminal rates are somewhat mispriced in the UK, so it makes sense to have the position and be patient," Balls told a conference in London.

Peder Beck-Friis, an economist at the bond giant, said he expected tight fiscal policy from Britain's government at a time when growth is already weak to weigh on the UK economy further, adding more pressure to the BoE to cut rates faster going forward.