Thank you — your vote has been counted.
When gilt yields suddenly jump, which part of Britain’s debt gets more expensive first?
-
A. Every gilt already in existence
107 votes (20.9%)
-
B. Only debt held by foreign investors
87 votes (17.0%)
-
C. New debt and debt being refinanced
226 votes (44.1%)
-
D. Every government loan immediately
92 votes (18.0%)
Total votes: 512
Answer: C. New debt and debt being refinanced
Explanation: Bond yields are often reported as though a rise suddenly makes Britain’s entire debt pile more expensive. But that’s not how most conventional gilts work.
Most have a fixed coupon, so when market yields rise, the government doesn’t suddenly start paying a higher rate on every existing bond. The higher cost feeds through mainly when the government issues new gilts or refinances debt that matures.