A UK government bond auction failed for the first time in seven years on Wednesday as investors refused to buy the securities amid worries over deteriorating public finances. Alarm over rising UK debt levels and renewed fears over inflation saw investors shun the auction, with bids for the long-dated bonds, due to mature in 2049, falling short of the £1.75bn wanted. A warning by Bank of England governor Mervyn King against further stimulus spending in next month’s Budget also rattled bond markets.

This entry was posted by Gwen Robinson on Thursday, March 26th, 2009 at 5:04 and is filed under Capital markets. Edit this entry.