Interest rates on gilts to double to 1970s' levels as population ages

[BlasterBates]

That's great so all those pension funds will earn wopping returns, meaning even more people can go into early retirement, meaning even higher returns.

Roll on retirement Britain.

[AtW]

Interest rates on government bonds and across the whole spectrum of finance will more than double over the next decade, pushing Britain back towards 1970s-style levels, according to an authoritative new study.

The combined effects of an ageing population and a more unstable economy will lift the cost of borrowing radically in the coming years, Barclays has warned. In its closely-watched Equity Gilt Study, the lender predicted the average long-gilt yield – the government interest rate which effectively influences borrowing costs across the entire economy – would rise from its current level of around 4pc to 10pc or beyond.

According to Tim Bond, of Barclays Capital, the increase in yields will be a direct result of the sharp increases in government deficits likely as the populations of Western economies age, and older workers retire, dampening broader growth.

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