In a move almost unthinkable this time last year the UK was yesterday seen as a safe haven for many of the world’s investors. Amid mounting concern over US and European debt, the interest rates on UK government debt fell yesterday to a record low.
The yield on 10 year gilts, generally accepted as the benchmark Government Bond, fell to 2.76% yesterday.
Britain’s 10 year gilts are now trading at just 0.10% above US treasury bonds, the average over the past two years has been 0.27%.
The reason for the fall in UK gilt yields can be found in disappointment over the US ...