UK 10 year gilt yields fall to record low

Emma Haslett
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Yields on government debt fell after the Bank of England governor made dovish remarks (Source: Getty)

UK 10-year bond yields fell to a record low of 1.402 per cent today, as investors rushed to plough cash into an asset largely regarded as "safe".

The fall came a day after Bank of England chief economist Andrew Haldane admitted that "there's no rush" to raise interest rates. If you're counting, base rate has now been at 0.5 per cent for 70 consecutive months.

At the same time, the Bank's governor, Mark Carney, suggested the UK could sink into deflation for a period of time, suggesting it will do all it can to keep borrowing costs low.

That dovish tone was enough to convince investors that the UK is a reasonably reliable bet.

The last time gilt yields were anywhere near this low was during the height of the euro crisis, in 2012, as investors sought refuge in the UK's relatively safe government debt. But that began to climb as rumours increased that the Bank of England could begin to hike rates.

Meanwhile, spooked by comments from Standard & Poor's, investors rushed to take their money out of Greek government debt, driving yields above 18 per cent.

Yields on UK 30 year gilts also fell to 2.1 per cent, their lowest level since 1996.

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