Campaign aims to take the mystery out of gilts

AS publicity campaigns go, the Bank of England's effort to persuade us to buy more gilts is decidedly low-key, writes Vivien Goldsmith.

The Government needs to sell more gilts to bridge the gap between its spending and income. But gilts have always seemed a little daunting. You either had to visit a stockbroker or go to a Post Office and cope on your own.

Now Post Offices will be displaying free booklets designed to make gilts less mysterious.

Investing in Gilts, a guide for the small investor goes through the basics of what gilts are and how they are sold, taxed and repaid.

For instance, the booklet explains: 'Prices change because people change their views about interest rate prospects. A coupon fixed at 10 per cent may look stingy when bank interest rates are 15 per cent; and it may look generous when bank rates are down at 6 per cent.'

The booklet stops short of giving any investment advice about when it might be good to buy gilts.

Ian Plenderleith, the government broker responsible for implementing its gilts policy, said there had been an increase in interest in gilts among the public.

'We hope this booklet will provide the information that the small investor needs. We want to make gilts as readily understood by a wider market as are many other forms of saving and investment,' he said.