Pattullo: Expect jitters in upcoming gilt auctions

Henderson head of retail fixed income John Pattullo provides his view on a volatile few weeks for bond markets and why he expects to see jittery gilt auctions.

At the same time as the Conservatives and Liberal Democrats were busy negotiating the terms of their new ‘Con-Lib' coalition, the Government was undertaking another successful £2.25bn auction of long-dated gilts, due to reach maturity in 2027. The auction was 2.47 times oversubscribed, which is a markedly better take-up than these auctions were achieving before the election. Clearly bond markets were enthused by the possibility of a Conservative-led government that would be able to push through its plans for reducing the deficit at a far more urgent pace than the one advocated by the ...