Pension funds’ appetite for long-dated gilts ‘temporary’
Gilt selloff spurs opportunistic buying but the trend is short-lived, say market participants
The recent selloff in gilts has spurred opportunistic buying among private UK defined benefit pension schemes, though this behaviour is seen as temporary, with a continued shift away from long-end gilts.
Thirty-year gilt yields have climbed steadily since UK chancellor Rachel Reeves’ Budget in October, which included a £32.3 billion ($26 billion) hike in government borrowing. Yields peaked at 5.45% on January 14 before retracing to 5.14% by January 27.
Rising gilt yields have shrunk the value of
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