Deloitte Monday Briefing: Why Are Bond Yields So Low?

The Monday Briefing, written by Ian Stewart, Deloitte's Chief Economist in the UK, gives a personal view on topical financial and economic issues.

• One of the striking features of the financial scene today has been the extraordinary low level of interest rates on the bonds of major industrialised nations.
• Interest rates – or yields - on ten year bonds issued by the UK government are at the lowest level since 1703. Over the summer yields on German and Swiss two year bonds turned negative, creating the remarkable situation in which investors are paying for the privilege of lending money to governments.
• Not everyone has benefitted from this process. Despite last week's announcement by the European Central Bank of unlimited bond buying, the cost of borrowing for ten years for the Greece government is more than ten times what Germany pays.