UK 10 Year Gilts
UK government bonds are often referred to as ‘gilts’, reflecting the historical levels of confidence in the UK economy.
While the UK Treasury, which is responsible for managing Britain’s debt, issues bonds with a variety of ‘maturities’, it is the UK 10 Year Gilt which is most closely followed.
The UK is still a member of the G10 group of large economies, and its debt is still rated as AAA by Standard & Poor’s, the international ratings agency responsible for assessing sovereign and corporate debt.
Traders of UK 10 Year Gilts will focus on a range of factors, including indicators of the health of the UK economy and its levels of borrowing. Amongst these are speeches made by the Chancellor of the Exchequer and the governor of the Bank of England, levels of unemployment, inflation statistics, interest rates, and estimated levels of economic growth.
It is the UK 10 Year Gilt bond which you will see quoted most often as a spread betting or CFD contract by online trading companies. There are other bonds issued by the UK of various maturities, by fewer firms will offer prices on these.
Online trading companies tend not to quote daily cash bets on sovereign bonds like the UK 10 Year Gilt. In addition, their daily points move will tend to be fairly small, requiring substantial leverage to make any appreciable profits from a trade.