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UK government bonds are often referred to as ‘gilts’, reflecting the historical levels of confidence in the UK economy.

While the UK Treasury, which is responsible for managing Britain’s debt, issues bonds with a variety of ‘maturities’, it is the 10 year bond which is most closely followed, and which you will see quoted most often as a spread betting or CFD contract by online trading companies. There are other bonds issued by the UK of various maturities, by fewer firms will offer prices on these.

Online trading companies tend not to quote daily cash bets on sovereign bonds like the UK 10 year. In addition, their daily points move will tend to be fairly small, requiring substantial leverage to make any appreciable profits from a trade.

Traders of the UK 10 year gilt price will focus on a range of factors, including indicators of the health of the UK economy and its levels of borrowing. Amongst these are speeches made by the Chancellor of the Exchequer and the governor of the Bank of England, levels of unemployment, inflation statistics, interest rates, and estimated levels of economic growth.

The UK is still a member of the G10 group of large economies, and its debt is still rated as AAA by Moody’s, the international ratings agency responsible for assessing sovereign and corporate debt.

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Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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