Article taken from: www.morningstar.co.uk
Editor’s Views: Why investors are paying to borrow money from the UK Government and sportswear can defy the slowdown Holly Black 22 May, 2020 | 11:19AM When the gilt yield turns negative for the first time and no one seems much bothered by it, you know things ain’t great. This week the UK Government was selling three-year bonds with an interest rate of -0.003% and the bamboozling bit is that the auction was oversubscribed. […] But these are not ordinary times and, as our analyst Louise Babin expertly explains , this may not be something to be overly concerned about. […] It means investors are so certain a country won’t default on its debt, that they’re willing to effectively pay it to hold their cash. […] But if shops and offices are closed and businesses are failing, the likelihood is that many will simply not be able to pay.
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