Gilt market is hostage to supply and demand bias

Real yields on 30-year gilts have now fallen as low as 37 basis points, says Paul Rayner, portfolio ...

Real yields on 30-year gilts have now fallen as low as 37 basis points, says Paul Rayner, portfolio manager at Royal London Asset Management, a reality he feels should be seen as the mark of a disorderly market. The situation has arisen, according to Rayner, because structural problems have created a gilt market that is not in control of its own destiny. "The UK gilt market remains a hostage to fortune as the supply and demand imbalance in long dated gilts and index-linked securities remains in place," he says. Rayner's analysis shows that 30-year yields have fallen some 50 basis points ...