Gilts

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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