UK sells index-linked bonds at negative real yield
The UK debt management agency sold £1.25bn of 17-year index-linked bonds at negative real yields in a debt auction earlier today.
The long-dated bonds have a real yield, after inflation, of -0.025 per cent.
After inflation is factored in, investors in the UK paper would be taking a small loss on the investment over the term.
Yields on 10-year gilts rose 1.4 basis points to 1.68 per cent, while Europe’s ‘safe haven’ Bunds rose 2.72 per cent, to 1.55 per cent at 15:15 in London.