Gilt-edged securities

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Gilt-edged securities, also referred to as gilts, are bonds issued by the UK Government to finance the national debt and fund government expenditure (both current and capital in nature); thus they represent a debt owing from the government. They are sterling-denominated, tradeable debt instruments that are generally regarded as carrying very low credit risk and form the core of the United Kingdom’s marketable central government debt. The term is of British origin, and referred to the debt securities issued by the Bank of England on behalf of His Majesty's Treasury, whose paper certificates had a gilt (or gilded) edge. In 2002, the data collected by the British Office for National Statistics revealed that at that time about two-thirds of all UK gilts were held by insurance companies and pension funds, but the proportion has since rapidly reduced, due especially to the decline in defined benefit pension schemes. Since 2009, large quantities of gilts have been created and repurchased by the...

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