Index-linked gilts sold at lowest-ever negative yield

The UK has sold £700m of long-dated index-linked gilts for a negative real yield of 0.116%, the lowest level ever recorded.

While relatively small in size, the sale of the 0.75% November 2047 inflation-linked bonds marks just the second time that index-linkers have been sold at auction with a negative yield. The auction had a bid-to-cover ratio of 1.9 times. The only previous occurrence of a negative real yield for an auction of index-linked gilts was seen last August, when 2022 index-linkers were sold with a negative yield of 0.065%. Elsewhere in Europe, safe haven flows have resulted in a number of conventional debt auctions producing negative yields in recent months as the eurozone crisis lingers on ...