LONDON Oct 11 The volume and value of UK
government bonds changing hands since Britain's decision in June
to leave the European Union has soared by as much 400 percent,
figures on Tuesday showed.
The frenetic trading in UK sovereign debt comes as investors
try to chart a path through the uncertain outlook for British
economic growth, inflation and interest rates in the coming
months and years after the June 23 Brexit vote.
Figures from Trax, a subsidiary of MarketAxess, show that
the daily average value of 10-year gilts traded since June is
4.9 billion pounds, almost five times higher than the daily
average of 1.1 billion pounds from January through May.
The volume of trades has also jumped, more than doubling to
a daily average of 263 trades from 110 pre-referendum.
"The market is grappling with how to model for the long-term
political changes," said Scott Eaton, Chief Operating Office at
"The full political and social impact of Brexit has yet to
be negotiated and realised, and the markets are clearly coping
with volatility, as evidenced by the swings in sterling and the
intense activity in the 10-year gilt," he said.
Trax provides post-trade services for around two-thirds of
all fixed income transactions in Europe.
Trading in UK markets has been extremely volatile since June
23. The 10-year gilt yield plunged to a record low 0.5 percent
in August but this week rose back above 1.0 percent
for the first time since June.
Sterling has tumbled to a 31-year low against the dollar
, and is now one of the worst performing currencies in the
world against the greenback this year. The Bank of England is
investigating a "flash crash" last Friday that saw the pound
plunge around 10 percent at one stage.
Sterling is within a whisker of hitting its lowest since at
least the 1970s on a broader, trade-weighted basis, but
this weakness has helped London-listed stocks claw back all
their initial Brexit losses and hit new all-time highs
(Reporting by Jamie McGeever; Editing by Catherine Evans)