Poor outlook for gilts following record issuance

Prices fall for three straight days following the Chancellor's announcement, with managers fearing £220bn bond issuance could flood market

Fund managers warn gilt prices could plummet over the coming months following the Government's plan for £220bn bond issuance this financial year. The benchmark 10-year gilt price fell for three straight days last week after Chancellor Alistair Darling was forced to admit the Treasury's 2009-10 gilt issuances will be 20% higher than most industry forecasts. Falling prices consequently drove the 10-year gilt yield to about 3.5% on Friday, up from just over 3.2% at the beginning of last week. "With issuance the equivalent of £1bn per business day, it seems inevitable the market will face...