UK Gilts saw increased demand as investors sought safe-haven assets. Concerns surrounding global economic growth and the unresolved eurozone debt crisis fueled the flight to safety.

Factors Driving Gilt Demand

• Global Economic Slowdown: Fears of a widespread economic slowdown prompted investors to reduce exposure to riskier assets.
• Eurozone Debt Crisis: Ongoing uncertainty in the eurozone continued to weigh on investor sentiment.
• Safe Haven Status: UK Gilts are perceived as a relatively safe investment during times of economic turmoil.

Market Impact

The increased demand for Gilts led to higher prices and consequently, lower yields. This reflects the inverse relationship between bond prices and yields.

Yield Curve

The yield curve flattened slightly as short-term yields remained relatively stable while long-term yields declined.

Analyst Commentary

Analysts noted that the trend is likely to continue as long as global economic uncertainty persists.