A government auction of £2.25bn of gilts was two-and-a-half times oversubscribed despite uncertainty over the result of the election.
The Debt Management Office announced it had sold £2.25bn of 2027 treasury gilts in an auction that was 2.47 times covered.
It says the highest accepted bid was £97.45, a yield of 4.461%. The lowest accepted bid was £97.25 and the rounded average accepted price was £97.31.
Insight Investment fund manager David Hooker explains: "At the end of the day, the gilt market has sold off on the political worries and yields have risen. Obviously there are people who think the level of yields now compensates them for the various risks they see in terms of the political situation.
"It has to be remembered that the UK still has an independent central bank which is committed to an inflation target. Neither sides of a possible coalition want to change that. So you really are just pricing in this electoral uncertainty."
Hooker saysInsight had no house view as to what way the political negotiations - noting the firm was happy to "watch from the sidelines" as to how the election would turn out.
Gilt yields have increased significantly over the past two weeks as uncertainty in the markets has grown.
On April 22, the DMO completed a £3.75bn auction of 2020 treasury stock - bonds of similar duration to the ones sold today - at a rounded average accepted yield of 4.078%.
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