What Are UK Gilts — How British Government Bonds Work and Why US Investors Should Care
If you follow the bond market, you know US Treasuries inside and out. But across the Atlantic, the United Kingdom issues its own sovereign debt — known as gilts — and they represent one of the oldest and most liquid government bond markets in the world. With UK long-term gilt yields sitting at roughly 4.45% as of January 2026 and the Bank of England navigating its own distinct rate cycle, gilts offer American investors a window into a major developed-market economy with different monetary policy dynamics, currency exposure, and diversification potential. For US-based investors accustomed to 10-year Treasury yields around 4.05% and the Fed Funds rate at 3.64%, the gilt market presents an intriguing comparison. UK gilts currently yield a noticeable premium to US Treasuries of similar maturity, reflecting the Bank of England's own inflation battle, the UK's fiscal trajectory, and the particular dynamics of sterling-denominated debt. Understanding how gilts work — their structure, their quirks, and how to access them — opens up a dimension of fixed-income investing that most American portfolios overlook entirely.