Gilt yields tumble to fresh record low

Gilt yields hit a new record low by mid-afternoon as investors continued to buy up UK debt amid concerns the European Union has not done enough to avert a financial meltdown.

The yield on the 10-year gilt dropped to a low of 2.07% this afternoon, the lowest level seen since the bonds were introduced in the 1950s, according to Thomson Reuters. 

The yield has beaten its previous record low of 2.08%. Yields retreated sharply following the European summit, with investors disappointed with the lack of progress in dealing with the eurozone debt crisis.

Mounting concerns Europe will fail to implement a plan to tackle debt levels across the peripheral nations and instill some fiscal discipline has once again panicked investors.

The rush towards safe haven assets has brought 10-year gilts down over 50 basis points in the past month, with the UK once again heading back towards parity with Germany.

10-year gilts are yielding 2.07%, while 10-year bunds are trading at 2.04%.

Meanwhile 10-year US treasuries, also a perceived as a safe haven, are yielding 2.01%.

Gilts have tumbled from above 3% at the start of the year.