(12PressRelease.com) Wilkinson Bennings Securities have reported that U.K. bonds are creating the biggest gains in the treasury debt market as Prime Minister Cameron‘s austerity plan postpones growth in favor of fiscal health.
Of the two dozen sovereign debt markets tracked, none have done better than gilts during the past two months, after generating the biggest monthly losses two months ago. They have returned 2.8 percent since early February, counting reinvested interest, beating the 1.7 percent surge in U.S. Treasuries and 0.5 percent rise in German bunds.
Cameron is braving vigorous protests and climbing unemployment to push through the most aggressive spending cuts since World War II and close a deficit that grew to 10.9 percent of GDP in the fiscal year ended on March 31, 2010. The benefit for taxpayers is lower borrowing costs as the price investors pay for credit drops.
Gilt sales in the coming fiscal year will drop to 161 billion pounds ($268 billion) from the record 229.2 billion during fiscal 2009-2010. The UK government plans to shrink the budget deficit to 1.8 percent of GDP by 2015 from the current 10 percent this year and eliminate more than 300,000 public-sector jobs.
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Estimates of future returns or indications of past performance in this release are for information purposes and should not be considered as a guarantee of future performance. Changes in currency exchange rates may have an adverse effect on the value or income. The level of tax benefits and liabilities will depend on individual circumstances and may be subject to change in the future.