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Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds are held until maturity, is it correct to say that an investment into UK bonds will then have a negative return on investment?

In other words, is it fair to say that by setting the interest rates this low, the UK government claims that purchasing its bonds is such a low-risk investment that it's worth paying for?

Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds are held until maturity, is it correct to say that an investment into UK bonds will then have a negative return on investment?

Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds are held until maturity, is it correct to say that an investment into UK bonds will then have a negative return on investment?

In other words, is it fair to say that by setting the interest rates this low, the UK government claims that purchasing its bonds is such a low-risk investment that it's worth paying for?

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Zubo
Zubo
  • 487
  • 4
  • 5

UK bond yield below inflation rate means negative ROI likely if held until maturity?

Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds are held until maturity, is it correct to say that an investment into UK bonds will then have a negative return on investment?