LONDON, July 15 (Reuters) - Britain sold a three-year government bond with a record-low negative yield on Wednesday, highlighting investors’ ongoing concern about the long-run impact of COVID-19 on the economy.
The United Kingdom Debt Management Office said investors bid to receive an average yield of -0.069% for the 3.25 billion pounds ($4.10 billion) of the 2.25% gilt that matures in September 2023, a record low auction yield for any conventional British government bond.
Two-year gilt yields touched an all-time low of -0.130% on Tuesday, despite government forecasters warning Britain’s budget deficit could approach 400 billion pounds this financial year, after official data showed the economy made a weaker-than-expected recovery in May.
Demand for the September 2023 gilt was solid, at just over twice the amount on offer. This gilt was the first conventional gilt to sell with a negative yield at an auction on May 20. ($1 = 0.7936 pounds) (Reporting by David Milliken, editing by Andy Bruce)