Reports indicate that big investors are keeping clear of gilts, also known as UK government bonds. This strategy is being adopted even though gilts offer some of the highest yields for investors in the developed world and is driven by a fear that the UK’s current inflation issues could still see borrowing costs become higher still.
The reluctance of big investors to dive into the current market has now pushed gilt yields far above those in other sovereign bond markets, putting further pressure on the UK government’s finances as it now searches to find buyers for what is now a record quantity of gilts.
Falling prices mean that UK borrowing costs have now shot high above the economies of its rivals in 2023 with a 10-year gilt now offering 4.4% yield compared to a 3.8% yield in the United States and 2.5% yield in Germany. Even the highest rates now being offered in the UK have failed to make government bonds standout attractive in comparison with other bond markets.
While big investors are steering clear of gilts, some other buyers in the UK have been keen to benefit from the higher yields. These include small investors seeking to earn better returns than standard bank savings accounts can supply.
UK consumers who are interested in profiting from UK government bonds and other asset classes often take independent financial advice in Shropshire and Buckinghamshire, among other counties. Wealth managers are independent financial advisors (IFAs) and are often counted on to provide an impartial and expert opinion of potential investment opportunities.
