For many years, the British government has issued index-linked gilts. As well as paying a coupon and redeemed in full at maturity, every year they also earn the equivalent of the rate of annualised retail price inflation. The country’s retail price index is currently at 3.2 per cent, roughly the average since 1992, though it did get as high as at 5.6 per cent in 2011. This tendency to inflation means the gilts are popular with retail investors and insurance companies. The current 10-year benchmark, at 0.125 per cent due in March 2026, was snapped off voraciously over the past three weeks, taking it close to last year’s record high at £124.65 (US$154.11) per £100 nominal – despite a rate rise by the Federal Reserve. Makes you think, doesn’t it?