3rd London Olympics sees UK bond yields back at 1908 levels

Economic growth


UK gilt Jul12.pngThis week marks the opening of the 3rd London Olympics. To celebrate, the blog today looks at developments in government bond yields since the 1st London Games in 1908. On Thursday, it will look at GDP per capita changes since the 2nd London Games in 1948.

In 1908, UK interest rates were the benchmark for the world. And as the chart shows, based on Barclays Equity gilt study data, they averaged 2.9% during the 1900s. In 1908 itself, they were 3%. Today, long-dated 30 year government bonds yield exactly the same amount.

In fact, as the chart shows, rates have always been around this level, with the exception of the 1970s-1990s. Many commenators make the mistake of focusing on recent history, and argue that higher yields are ‘normal’.

But they are not. It was only the arrival of the BabyBoomers (those born between 1946-70) that created a major increase in demand as we moved into the 1970s. The rise in UK births was quite astonishing:

• They averaged 784k between 1921 – 1945
• They jumped 15% to 901k in the next 25 years, 1946 – 1970
• Since then, they have fallen 17% to average just 744k

Unsurprisingly, bond yields have fallen back to historical levels again.

Equally, fewer people in the Wealth Creator 25 – 54 age group means that overall demand levels will be lower. Plus, UK life expectancy has risen from 50 years in 1908 to around 80 years today.

This means 18m people, 28% of the UK population, are now in the New Old 55+ age group. They need to save more, and spend less, in order to finance their extended life span.

As we argue in Boom, Gloom and the New Normal, demographics drive demand. Those companies who adapt to the changes underway will win the medals in years to come.


'Waiting for Bernanke' is hottest show on Wall Street


‘Waiting for Godot’, the great play by Irish writer and Nobel Litera...

Learn more

Sinopec focuses on political and social targets


Sinopec is China’s main company in refining and chemical markets. Although...

Learn more
More posts
The New Normal for global industry

The global chemical industry is the third largest sector in the world behind agriculture and energy,...

Debt, deflation, demographics and Brexit set to challenge London house prices

London property websites haven’t used the word “reduced” for many years. But it...

The bill for two decades of doomed stimulus measures is due

The Financial Times kindly made my letter on the risks now associated with central bank stimulus the...

Local supply chains replace global trade as world starts to “do more with less”

Something quite dramatic is happening in the global economy.  Of course, Wall Street analysts still...

Financial markets enter their Convulsion phase

Many companies and investors are still comparing today’s downturn to the 9-month hiccups seen afte...

World risks moving from Denial into Anger as the Paradigm of Loss moves forward

The head of the IMF has warned again on the likely scale of the economic depression ahead: “Gl...

The world has wasted 3 months – there is little time now left to avoid a Covid-19 catastrophe

It is now 3 months since China’s state television broadcast the first news of the Wuhan virus,...

A new recession era to emerge

Contingency planning has become mission-critical. The longer the coronavirus pandemic continues, the...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more