Sales of gilts soar thanks to Britain's status as a safe haven
Thursday 05 January 2012
Britain's safe-haven status triggered the sharpest spike in gilt purchases by foreign buyers since the Lehman Brothers collapse, Bank of England figures showed.
Net purchases by foreigners increased by £16.3bn in November, compared with £12.5bn the previous month.
Gilts were the best-performing government bond in the world last year, with their value gaining 17 per cent. Yields – in effect the interest rate Britain pays to borrow on the financial markets – correspondingly fell massively during the period as demand was so high. At one stage gilt yields were lower than those of German government bonds, traditionally Europe's safest harbour in financial storms.
The low yield and high price of gilts is attributed by analysts to the Government's tough austerity plans and the associated economic slowdown which makes it highly unlikely that the Bank will raise interest rates in the foreseeable future.
- 1 Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
- 2 Maisie Williams has an excellent message for one confused fan
- 3 Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
- 4 Tampon tax scrapped in Canada after petition convinces conservative government
- 5 Kate Moss on the naked Calvin Klein shoot and the obsession that ended her relationship
Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
Maisie Williams has an excellent message for one confused fan
Archaeologists discover 2,400-year-old gold bongs in Russia
Tampon tax scrapped in Canada after petition convinces conservative government
Migrants in Kos: Photos show real tragedy after British tourists complain of 'awkward' holidays
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...