A new equilibrium
The rise in the 30-year term premium is, in many ways, a return to normal after two decades of artificially compressed yields. For years, regulation and demographics combined to create “borrower’s privilege”, a steady, price-insensitive demand for long-dated gilts. That world has changed. Defined-benefit pension schemes are de-risking, insurers are diversifying, and the government must now rethink what sustainable gilt demand looks like.
Ultimately, the question isn’t who the marginal buyer is, it’s whether fiscal and monetary credibility remain intact. Investors need confidence that policy choices are coherent, consistent and forward-looking.
That credibility is the price of reassurance, and the only way to keep gilt yields anchored in an environment where bond-market discipline is very much back.
Clients of Barclays Investment Bank can read more on this, and similar topics related to the UK’s Autumn Budget 2025 on Barclays Live.