Strong data sparks market sell-off on fears stimulus is over The data continues to improve and impress the marketplace and I think the data will continue in this direction. Then the question becomes not whether they are tapering in September, but how much," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York. US government borrowing for 10-year debt costs briefly touched a two-year high before dropping back a little to 2.78pc, a six basis point rise, following the jobs and inflation figures. Benefit claimant numbers dropped 15,000 to 320,000, the lowest level since October 2007 and beneath forecasts of 335,000. The consumer prices index of inflation rose from 1.8pc to 2pc between June and July. In the UK, 10-year gilts rose 4.5 basis points to 2.679pc after the Office for National Statistics revealed that annual retail sales growth in July was the fastest since January 2011. HSBC responded by lifting its growth forecast from 0.8pc to 1.2pc this year and from 1.7pc to 2.2pc in 2014, and several economists predicted that third quarter UK growth would now be better than the strong 0.6pc registered in the three months to June. Sam Hill, a gilts strategist at RBC Capital Markets, said: "The momentum behind this idea there's an economic recovery taking hold is putting upward pressure on yields across markets." However, the Bank would have been encouraged to see two-year borrowing rates fall 1.8 basis points to 0.408pc as its ground-breaking commitment to hold rates at 0.5pc until unemployment hits 7pc, unveiled last week, was intended to influence the short end of the so-called "yield curve." The prospect of a gathering economic recovery drove up sterling, which closed 0.4pc higher against the dollar at $1.5576 and 0.32pc higher against the euro at €1.1740. The FTSE 250, which is more representative of the UK than the blue chip index, fell 2.6pc to 14,693 on the prospect of rate rises.