UK sold negative yield government bonds

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Bulldoggie
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UK sold negative yield government bonds

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On Wednesday, the UK sold negative yield government bonds for the first time. This means that investors are actually paying for the opportunity to lend to the British government.

The UK has sold £3.8bn worth of three-year bonds at a yield of minus 0.003%, according to the DMO's debt management office. The negative rate of return indicates that investors who keep their debt to maturity will get back less than they paid.

This reflects investors' growing expectations that the Bank of England may have to take additional steps to restore inflation to the 2 percent target. Wednesday morning, inflation was reported to have fallen to 0.8 percent in April, the lowest since August 2016.

Source: DMO

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