ECONOMY WATCH

THE financial markets entered uncharted territory this week as Germany sold five-year debt at negative interest rates for the first time in history.

The investor who buys the bond – and in doing so lends the government money – usually receives interest on the loan.

But Germany sold £2.4bn of bonds at an average yield of minus 0.08pc – so investors pay the German government interest.

‘Logically you might ask why anyone would buy something with a negative yield,’ said Steven Major, global head of fixed income at HSBC. ‘It’s a fascinating situation.’