The flight to quality out of the stock markets on Wednesday, which caused government bond yields to fall, may prove to be a boon for the corporate bond market, according to analysts at Barclays Capital.

Gary Jenkins, fixed income analyst at Barclays Capital, said that if investors decide that the equity markets will remain weak for some time, they may decide to increase their exposure to spread product rather than stick to the government bond market. This is particularly significant for the UK as the government decided last week to abolish the minimum funding requirement, which has created a dependence on long-dated Gilts.