Gilts

1. Financial markets - financial instruments - UK central government debt.

Most commonly in UK usage, UK central government debt.

Also known as Gilt-edged securities, or Gilt-edged stock.

Example 1: Short-dated Conventional gilt

An example of a short-dated conventional UK gilt was the 2% Treasury Gilt 2020.

Each £100 gilt repaid £100 to the owner on 22 July 2020.

It also paid interest on 22 July 2020, calculated at 2% per year. It was originally issued in 2014.

It paid a predetermined fixed amount of interest (2% per year) throughout its whole life.

It was repaid at a fixed amount of £100 at its maturity on 22 July 2020.

Whatever happened to inflation before final maturity, these amounts did not change.

Example 2: Long-dated Conventional gilt

A very long dated conventional gilt is the 4% Treasury Gilt 2060.

It will pay interest at 4% per year until 2060.

Example 3: Index-linked gilts

Index-linked gilts pay out larger amounts, the higher the rate of inflation.

The 'index' they are linked to is the UK Retail Prices Index (RPI).

About 25% of UK gilts are index-linked, with 75% being conventional.

Historically, gilts were printed on gilt-edged paper (heavy bond paper with a metallic edge, usually gold-leaf or gold paint).

The heavy expensive looking paper was designed to give confidence in the promise.

2. Financial markets - central government debt.

The term 'gilt' is also used to refer to the debt of certain other central governments, especially US government treasury securities.

See also

• Bill
• Bond
• Bond vigilante
• Bund
• Debt Management Office
• Exempt gain
• G+
• High-yield
• Index-linked gilt
• Investment grade
• Liquid
• Liquidity
• Paper
• Risk asset
• Risk-free asset
• Risk-free rate of return
• Risk-off
• Risk-off asset
• Risk-on
• Semi-annual rate
• Share
• Sovereign
• Stock
• Stock exchange
• Swap spread risk
• Tap stock
• Treasury
• Treasury securities
• UK gilt crisis
• United Kingdom