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Home > Investments > Fixed Income

UK 35-year gilts sold with negative real yield

The UK’s Debt Management Office (DMO) has today sold £700m worth of index-linked gilts with a negative real yield after inflation.

By Nick Reeve | Published Jan 10, 2012 | comments

The debt auction, which attracted more than £1.3bn worth of bids, sold bonds maturing in 2047 with a yield of 0.75 per cent. Taking inflation into account, this makes for a negative real yield of 0.116 per cent.

The DMO allocated roughly 9 per cent of the bonds on sale - equal to £66.1m of the total raised - to non-competitive bids in order to reach the target amount.

The auction was 1.9 times oversubscribed - an improvement on the 10-year auction on December 1, which raised £3bn but was the weakest in terms of investor interest since February 2009.

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