UK receives £30bn in orders for green bond

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Investors rushed to buy “green” government bonds, despite the turmoil in the financial markets.

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In a sign that the appetite for UK sovereign debt remains strong, the UK has received £30.1bn in 30-year bond orders to finance green projects.

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Strong demand for £4.5bn worth of bonds will come as a welcome relief in Downing Street and the Treasury following last week’s tax cut mini-budget turmoil.

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Green growth: The UK has received £30.1bn in 30-year bond orders to fund green projects.

But the government will have to pay the highest interest rate on any debt it has issued since 2011, following the recent fall in bond prices and a sharp rise in yields.

Bond yields around the world have risen sharply over the past year as central banks raise interest rates to cope with rising inflation.

They soared even higher last week amid worries about how the UK will pay for capping energy prices as well as a £45bn tax cut.

Benchmark 30-year British yields topped 5% for the first time since 2002 early yesterday morning, down less than 1% from a year ago, but plummeted to below 4% following the Bank of England’s bond market intervention. promising to buy old gilts “on whatever scale is necessary” to restore “orderly market conditions”.

Green bonds sold yesterday will pay an interest rate of 4.29%, the highest for any UK debt sold since April 2011.

Prior to the intervention by the Bank of England, investors were looking for a return of around 5.1%, the highest since 2008.

“Today’s deal came against a backdrop of high market volatility, so it’s all the more gratifying that it was well received by the market,” Robert Steeman, chief executive of the UK Debt Management Office, said after the sale.

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