Downward move in gilt yields may have implications for the cost of servicing the government’s near-£100bn budget deficit
Falling inflation and the prospect of official interest rates being kept on hold for longer sent the government’s benchmark measure of borrowing costs tumbling to an all-time low on Thursday.
With the prospect of the rapid fall in oil prices bringing deflation to Britain within the next few months, the yield, or effective interest rate, on 10-year gilts touched 1.396% at one point during the day – lower than during the worst point of the eurozone crisis of 2012, and the first time in history it had been below 1.4%. They closed at 1.42%