Foreign Appetite for Gilts Revives as Bond Worries Shift Back to Eurozone

Fears of Gilts strike by foreign fund managers have receded, at least for now

by Ambrose Evans-Pritchard

Foreign investors returned in force to the UK bond market in September, snapping up a net £13.3bn in gilts as fears of a full-blown Brexit crisis faded.

The purchases are the highest in almost a year and allay fears that central banks, sovereign wealth funds, and Asian institutions may be losing confidence in the blue chip fundamentals of the British state.

The figures suggest that fund managers rebalanced their core bond portfolios in September by buying more gilts as sterling drifted down, the normal reflex for holdings in a world reserve currency. Foreign buyers had sold gilts in July and largely stayed away in August.

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