Gilt yields rapidly rise to 1% post-Brexit high


The yield on the benchmark 10-year gilt has pipped the 1 per cent mark this week – the first time since the UK voted to leave the European Union.

Yields reached an all time low on 12 August when they hit 0.52 per cent, but have been rising in tandem with the pound’s fall over the last week, with yields at 0.73 per cent last Monday.

By this Monday it had hit 1 per cent.

The price of the 10-year gilt has fallen 3.7 per cent since highs on 12 August.

Hargreaves Lansdown investment analyst Laith Khalaf attributes the rising yields to overseas investors dumping UK assets.

Khalaf says companies with pension deficits would be winners in any continued rise in yields, while Chancellor Philip Hammond, who has hinted at boosting government spending on infrastructure, may be one of the losers from such a move.

“The new Chancellor may be hoping government borrowing costs don’t rise too much further, if he is planning a debt-fuelled spending spree on infrastructure in his Autumn Statement, as is now widely anticipated.”