There is no end in sight to the rise in long-dated gilts, according to research from Bank of America Merrill Lynch, as Bank of England purchases are set to far outstrip supply through to the end of the first quarter 2012.

While the gloomy forecasts for the UK economy contained in George Osborne's autumn statement were widely predicted, the weighting of additional gilt issuance for the remainder of this year towards the shorter end of the yield curve took the market by surprise, according to John Wraith and Mark Capleton, rates strategists at Bank of America Merrill Lynch.