First UK bond yield turns negative, first-time buyers and free electricity

UK shares have risen for the third successive day after Mark Carney said the Bank of England could cut interest rates following the Brexit vote.

In a speech yesterday afternoon, the Bank of England governor hinted at fresh stimulus measures following the referendum. According to the BBC, the FTSE 100 index opened 0.63 per cent higher this morning, while the FTSE 250 is higher by 0.42 per cent. The pound is currently trading flat against both the euro and the US dollar.

A surge in investors seeking out safer investments means that, for the first time, the return from a UK government bond has turned negative – the gilt that matures in March 2018 is offering a ‘return’ of minus 0.04 per cent. That means anyone who buys the bond is effectively paying the UK government for the privilege of lending it money. Laith Khalaf at Hargreaves Lansdown said: ‘The UK is now officially through the looking glass, as the Brexit vote has pushed gilt yields below zero for the first time.