Long gilt market shows no signs of weakening

The imbalance between demand and supply in the gilt market continues to create an inverted yield curve, with little sign that increased issuance will alter the situation. In the 30-year area of the curve, gilts are yielding around 4.3% with 10-year gilts on a yield of 5.15%. Institutional demand continues to be strong at the long end of the market, with many life insurers buying long-dated gilts to get the necessary asset liability matching in pension funds. With Government finances heading for another surplus in the financial year, there appears to be little need for more gilt issuance. ...