UK gilt sell off faster than 2009 on election fears

Foreigner investors have been selling UK gilts at a faster rate than at the peak of the financial crisis in 2009, ahead of an unpredictable general election.

According to data from the Debt Management Office, non-residents sold £14bn worth of gilts during January and February, a higher amount than in early 2009. The bid-to-cover ratio at gilt auctions has fallen to a six-year low of 1.19 on five-year debt, having continuously slipped over the past nine months. Yields on 10-year UK government bonds have slightly increased from a low of 1.33% in January to 1.55%, but remain near historic lows. The Telegraph quotes Nomura as saying large Japanese investors are avoiding UK gilts, with bond money flowing into the US and Asia instead. The ...