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Foreign investors bought UK government bonds again in February after selling gilts at the fastest pace of sales in three years at the start of 2017.

Data from the Bank of England revealed £742m of net gilt purchases by overseas investors in February following net sales of £7.6bn January. The January selling was the worst monthly drop since March 2014.

Foreign investors own about a quarter of the UK’s outstanding gilt market, making them crucial players in the country’s ability to fund itself at low rates on global markets.

Having hit a 2017 high of 1.5 per cent in January, the UK’s 10-year gilt yield has settled around 1.2 per cent in recent weeks. Demand for gilts is holding steady today as the UK prepares to trigger its official EU exit.

Copyright The Financial Times Limited 2017. All rights reserved.

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