A closely watched sale of UK government debt attracted robust demand today despite the ongoing turmoil in the gilt market.

The Debt Management Office (DMO) said that its £1bn sale of 30-year index-linked gilts was three-times oversubscribed, indicating that interest from investors remained solid. Demand was down marginally on last year, when the auction was 3.1 times oversubscribed.

The yield on the gilt – which is tied to inflation – was 2.126 per cent, hovering around its highest level in 22 years.

The auction comes amid intense pressure on gilts as investors demand higher interest rates to lend the government money.

Yields on both the 10-year and the 30-year gilts have increased for six consecutive days, leaving the yield on the 10-year bond at a post-2008 high and the yield on the 30-year at a post-1998 high.

Sterling meanwhile has fallen to its lowest level in over a year, signalling a loss of investor appetite in the UK.

The sell-off has been driven both by concerns about the government’s fiscal policies and fears that inflation will remain higher for longer in the US, slowing the pace of interest rate cuts.