He says the problem the UK faces is that having already seen one failed auction, competition from other recession-hit economies such as the US and European countries may sway investors elsewhere.
He says: “Investors are going to look for those higher yields, given that the increased issu- ance and 10-year gilt yields have already been driven up to 3.45 per cent.”
But Ignis chief economist Stuart Thomson does not believe there will be a buyers’ strike.
Thomson says the Bank of England’s programme of quantitative easing will account for two-thirds of the planned gilt issuance.
He says: “Add to this the fact that there will be demand from pension funds and that banks are being forced to buy gilts and you can see how the issuance will be taken up.”