Despite growing concerns about the state of the UK's finances and the possibility of a hung parliament after the forthcoming election, Britain's latest gilt auction saw strong demand from institutions.
Around £2bn worth of 30 year gilts were sold this morning, with investors putting in bids worth nearly twice the amount of September 2039 gilts on offer. This was better than the outcome for the last four auctions of this issue, even after all the recent talk of the pressure on the UK economy and the possible problems with tackling the country's finances if there is no overall winner in the election. Analysts said the demand for today's issue came from pension funds and insurance companies keen on the yield from the long-dated gilts. In the bond market the June gilt future moved higher to 114.42 after the auction.
