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The City breathed a sigh of relief today when investors turned out in force to buy government debt, following yesterday's auction debacle.
The sale of £1.1bn of inflation-linked gilts (government bonds) maturing in 2022 was almost three times oversubscribed, indicating a healthy level of interest from investors.
The UK debt management office said it attracted £2.98bn of bids. David Buik of BGC Partners described the result as "an unqualified success".
It contrasts with yesterday's auction, when the government could not find enough buyers for its £1.75bn sale of 40-year gilts - the first failure of a gilt auction in seven years. This cast doubt on the government's ability to borrow billions of pounds to lift the economy out of recession.