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31 August 2012 last updated
Gilt Yields - August 2012 review
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15-Year Gilt Yields - August 2012
Latest yield:   1 month change:   3 month change:   6 month change:   1 year change:  
2.07%  
gilt yields up   0.03%
 
gilt yields down   0.05%
 
gilt yields down   0.52%
 
gilt yields down   1.27%
 
15-year gilt yields 2012
Fig 1: 15-year gilt yields chart showing rates to August 2012

 

Uncertainty over ECB ability to buy sovereign bonds keeps gilt yields low

Find out more: annuity rates for August

The 15-year gilt yields increased slightly during August up 3 basis points to 2.07% after being as high as 2.27% earlier in the month and at an all time low of 2.02% on 2 August 2012.

The European Central Bank (ECB) said it would do "whatever it takes" to support sovereign countries that find themselves requiring a bailout and investor confidence increased in July. On 6 September 2012 the ECB will give details of how it can achieve this and as the meeting approaches investors have moved funds back to safe havens such as UK government bonds and gilts.

A positive outcome would mean both equities and gilt yields will increase as investors have more confidence in European bonds where the yields for 10-year bonds in Spain are at 6.23%, Italy at 5.69% and Portugal at 9.46%.

For August the yields range for the month was from 2.02% to 2.27% or 25 basis points which is similar to the previous month. Fig 2 below shows the daily 15-year gilt yields and the increase or decrease from the previous day's close:



15-Year Gilt Yields - August 2012
    Wed 1st Thurs 2nd Fri 3rd
   
2.09%
gilt yields up   0.05
2.02%
gilt yields down   0.07
2.12%
gilt yields up   0.10
Mon 6th Tues 7th Wed 8th Thurs 9th Fri 10th
2.07%
gilt yields down   0.05
2.15%
gilt yields up   0.08
2.13%
gilt yields down   0.02
2.17%
gilt yields up   0.04
2.09%
gilt yields down   0.08
Mon 13th Tues 14th Wed 15th Thus 16th Fri 17th
2.12%
gilt yields up   0.03
2.16%
gilt yields up   0.04
2.24%
gilt yields up   0.08
2.24%
gilt yields no change
2.23%
gilt yields down   0.01
Mon 20th Tues 21st Wed 22nd Thurs 23rd Fri 24th
2.21%
gilt yields down   0.02
2.27%
gilt yields up   0.06
2.21%
gilt yields down   0.06
2.15%
gilt yields down   0.06
2.10%
gilt yields down   0.05
Mon 27th Tues 28th Wed 29th Thurs 30th Fri 31st
 
2.07%
gilt yields down   0.03
2.08%
gilt yields up   0.01
2.04%
gilt yields down   0.04
2.07%
gilt yields up   0.03
  Fig 2: Daily 15-year gilt yields and changes


Despite the slight increase in gilt yields annuity rates have reduced with standard, smoker and impaired annuities lower by up to 4.1%. Standard annuity rates are lower by 1.99% and smoker rates by 0.92%. With gilt yields virtually unchanged it would appear that annuity rates can increase in August by between 1.22% to 2.29%. For the latest updates see Annuity Rates 2012.


 
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