Britain sold a government bond with a negative yield for the first time on Wednesday, meaning the state is effectively being rewarded to borrow as investors agree to be repaid slightly less than they lent.
FILE PHOTO: A British pound note is seen in front of a stock graph in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration/File Photo
Yields for two-year benchmark gilts, which are sensitive to Bank of England interest rate expectations, sank to a record low -0.051% last week. Financial markets see a strong chance that the benchmark rate could dip below zero later this year. Appetite for British debt has been strong since then, a relief for the government which is on course to borrow hundreds of billions of pounds this year due to the coronavirus.
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