War Loan

I see it is pretty much confirmed that the good old War Loan 3.5% is being repaid next March. Congratulations to anyone who bought it low. However, I will miss it a bit as a sort of compass point (e.g. yield on a risk free callable perpetual), and it was just about the best yield available from a gilt.

Presumably calling this is a sign the Treasury is confident gilt yields will stay low for a very long time to come. Any thoughts?


  • Louis, Your views are similar to mine, hence my decision to purchase a number of P.I.B.S. during November, in addition to those purchased earlier in the summer. Not too keen to purchase undated securities (some have call dates), but lack of new ORB bond issues forced my hand!
    Also, recently started looking at other securities offering a reasonable rate with capital fairly secured, these being JLIF & HICL (infrastructure funds).
    Should inflationary pressures start to show, my 2021+ Orb (long dated) bonds are likely to be dumped fairly swiftly.
    With oil & other resources prices falling, deflationary fears may become real sooner than later, and for a much longer period.
    I see little sign of wage inflation within the UK (immigration is helping to keep the lid on this problem).

    Any other views?
  • I've just got the point where I've been able to pay a reasonable amount into my SIPP but, with all the 'fluctuations' (i.e. falls!) in the market at the moment, I think I'm going to sit on the cash for a while ...
  • Markets beginning to look more unpredictable, like sea kayaking in rough seas. However there maybe opportunities in the troughs (providing the trough isn't a waterfall!).
    As you say, DSC, no planned purchases before the New Year
  • I'm one of the 'lucky' ones as I bought a chunk of war loan several years ago, but I'm disappointed because I have no idea where to put the money and earn 3.5% risk free for ever. Wage inflation driving retail inflation has been the achilles heel of the UK economy for decades. I believe 2 things mean it wont be back soon...immigration as Shaunm, but also an over-educated workforce. (Over-educated being different to over-skilled)
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