Gilt market risks | Insight Investment

Key takeways

• We consider how gilt pricing works in practice, focusing on long‑end spreads, funding frictions, and differences across gilts by maturity, coupon and convexity.
• Considering who owns and buys gilts, tracing shifts in the investor base over time, reveals a significant shift in the market.
• Changes in market structure and demand feed through into the UK’s issuance strategy and the evolving cost of issuing government debt – with political risk emerging as the most significant domestic factor to consider.