Current UK Gilt Rates

The chart below shows current UK Gilt rates. For more information move your mouse pointer over the chart.

Gilt Rates

Conventional Gilts

Constituting the largest share of liabilities in the Government’s portfolio, conventional gilts are the simplest form of government bond and are a liability of the Government which guarantees to pay the holder of the gilt a fixed cash payment (or coupon) bi-annually until the date of maturity. At this point the holder receives the final coupon payment and the return of the principal. Although conventional gilts can be traded in units as small as 1p, the prices are quoted in terms of £100 nominal.

Index Linked Gilts

Index-linked gilts (IGs) form the largest part of the gilt portfolio, second only to conventional gilts. In 1981 (first issue) the UK was one of the earliest developed economies to issue index-linked bonds for institutional investors. Like conventional gilts, the coupon on an index-linked gilt reflects the borrowing rates available at the time of first issue. Index-linked coupons reflect the real borrowing rate for the Government rather than the nominal borrowing rate so there is a much smaller variation in real yields over time.

Gilt Strips

Commonly known as “strips” (Separate Trading of Registered Interest and Principal Securities), stripping a gilt refers to breaking it down into its individual cash flows. These can then be traded separately as zero-coupon gilts. A three-year gilt will have seven individual cash flows comprising six semi-annual coupon payments and a principal repayment. The reconstitution of the individual strips can also be applied. In the UK the strip market began on 8 December 1997 and all strippable gilts are presently conventional fixed coupon implements. Concentrating sales of conventional issues into strippable gilts is something the UK authorities have done for some time, and the DMO intends that all issues of new conventional gilts will be strippable (with a delay after the first issue date).