Where a gilt is bought, and where it is traded.

The first sale is the primary market. The Debt Management Office publishes a calendar and sells at auction, so the funding is regular and buyers can get ready. The firms allowed to deal with it directly are the gilt-edged market makers. They bid, for themselves and for clients, and they make a market in the gilt afterwards.

The auction is a small weather report. If investors offer to buy much more than is for sale, appetite is healthy. If the bids only just cover the amount, or if the yield the government has to accept sits above the average accepted bid — the gap is called the tail — buyers are wary. How the bidding works, which maturities are sold, and how that yield sits on the curve, is the page on gilt auctions. The reason the auctions never stop is how much falls due, and when. Gilts mature, and they are paid off by selling new ones.

Every later sale is the secondary market. Without it, a gilt would be locked away until the maturity date, and a pension fund could not use it as a way to hold savings. The yield curve is a picture of that secondary market, not of the auction itself. An auction is one morning. The curve is the price of every maturity the rest of the time.

Gilts are not traded like shares in a large company, lined up on an order book. You deal with a dealer, who holds an inventory and quotes a buying price and a selling price. The gap between the two is how the dealer is paid for tying up capital, and for the risk that the market moves while the bonds are on the shelf.

In a gilt that everyone trades, on a calm day, that gap is tiny: a few hundredths of a percent in yield. In a bad week, dealers pull back and the gap widens. Nothing on this site is a live dealer quote. The yields are the Bank of England's fitted curve, and the official series named under each chart.