Today, government bond yields and bank deposit rates sit very substantially – and uncomfortably - below where they were 5 and 10 years ago, in negative after-inflation terms and more-or-less-zero before inflation terms. In March this year, the UK Government issued its first negative-yielding gilt borrowing £3.8 billion at -0.003% for a 3-year maturity. In other words, they are getting paid to borrow money by investors! What a strange world we live in today.
Read the full issue of Insight, click the link below.