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The car boot gilt sale

Gilts are super secure investments which fund government borrowing. They are sold, or auctioned when the country’s leaders need to raise money against the security of the UKs international credit rating.

Today it has been reported the government has not been able to sell all of its latest auction of gilts.

A failure to sell everything at a gilt auction is not good news because it implies the market of potential investors in the government’s debt, is worried about the credit worthiness of the government itself. This worry may be a result of the large financial measures the government is already taking to try and prevent the recession deepening (see blogs past). These measures are being largely funded by borrowing, financed through the sale of gilts.

The BBC’s report is here, or, get it from Tim Worstall, here.

What are gilts – from Wikipedia

How do gilts work – from the Telegraph

UPDATED: 4.20pm same day.

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