Conventional gilts account for approximately what proportion of UK government bonds?

Conventional gilts account for approximately what proportion of UK government bonds?

• A. Around 75%
• B. Around 25%
• C. Around 50%
• D. Around 90%

Answer: (A)

Conventional gilts are fixed-rate bonds with a predetermined coupon and maturity, forming the majority of the UK government bond market. The other category, index-linked gilts, have principal (and sometimes coupons) that rise with inflation. The market split is typically around three-quarters conventional and one-quarter index-linked, so conventional gilts account for about 75% of UK government bonds.

Conventional gilts are fixed-rate bonds with a predetermined coupon and maturity, forming the majority of the UK government bond market. The other category, index-linked gilts, have principal (and sometimes coupons) that rise with inflation. The market split is typically around three-quarters conventional and one-quarter index-linked, so conventional gilts account for about 75% of UK government bonds.