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from Neil Collins:

Gilts buyers forced to pay protection money

It's expensive, this risk-free investment business. You can lend to the UK government for 28 years and be guaranteed a real return, after inflation, of  a magnificent 0.816 per cent on your money.

Put another way, if there was no inflation over the period, 100 pounds would have turned into about 125 pounds by 2037, to add to the 81.6 pence a year (before tax) you'd have had in annual interest.

Yet on Thursday the DMO managed to sell 500 million pounds-worth of an index-linked gilt on these terms. Furthermore, it could have sold three times as much, such was the enthusiasm of the buyers for the paper.

Why on earth were they so keen on something so palpably unattractive? The answer is the increasingly unreal rules covering company pensions. Driven by an unholy alliance of actuaries and accountants, companies have been forced to find assets to match future pension liabilities.