Strong demand has lifted the take up for Britain’s first 55-year UK government gilt towards £5bn, according to bond managers, as institutions sought to lock into the longest-dated issue seen in Britain since the war.

The buying interest, originally forecast at between £3.5bn and £4.5bn, meant the spread over the next longest - 50-year - issue, maturing in 2060, is likely to be 3.5 basis points, close to the bottom of the expected range. This spread would imply a final coupon of 3.63%, the managers added.