Explain the market performance of UK Gilts and equity markets over the last 12 months and discuss the influences that have driven this performance.The market performance of British gilts and stocks and stock markets have varied over the last 12 months. In 2013, the FSTE 100 recorded its best performance in four years. However, a slight decline in bond prices and an increase in their yield meant that negative market conditions emerged, leading to a bullish Gilt market in 2013. (Chu,B.2013) Some of the Kingdom's major stock markets United include the FTSE 100 and the FTSE Total Share. They are markets where shares are issued and traded. Over the last 12 months it shows that the FTSE 100 has seen an increase in its index. (Yahoo.2014) As of 25 Feb 13' the FTSE 100 has been trading at 6355.40 compared to 25 Feb 14' - 6830.50, recording an increase of 475.1 points (7.5%) over the 12 period months. Below is the FTSE All-Share (red line). In the last quarter it appears to outperform the FTSE 100. (Yahoo.2014) The FTSE All-Share offers a much higher return in 2013 (9%), due to the risk of smaller companies. Concluding that all UK stocks saw a big increase in investor return over the 12 months, despite the fluctuations. The UK Gilt market consists of UK government bonds issued by the Treasury. These Gilts range from 2 to 30 years with current yields from 0.50% to 3.52%. This means that these yields increase with maturity, giving a higher yield. (Bloomberg.2014) For example, the UK 5-year Gilt yield has a current yield of 1.64% compared to 0.77% a year ago. When bond prices fall but yields rise, an inverse relationship exists. This can lead to potential losses that have occurred within 12 months. (Heath,A.2013) comment...... middle of the sheet ......itain-ipo-data-idUKBRE9AE0PE20131115Renaissance capital. (2013) Global IPO Market. Capital of the Renaissance [online]. December 18, 2013, p2. Available at: http://www.renaissancecapital.com/ipohome/review/2013globalreview.pdf http://www.tradingeconomics.com/united-kingdom/interest-rate (Trading Economics.2014) Duncan, H. ( 2013) Rising bond yields will increase Britain's national debt over the next five years, potentially adding £13,000 per household. This is Money [online], 8 September 2013. Available at: http://www.thisismoney.co.uk/money/news /article-2415636/Bond-yield-increase-swell-Britains-national-debt- years.htmlQ&A: What is forward guidance? BBC NEWS [online], 12 February 2014. Available at: http://www.bbc.co.uk/news/business-23145755Hohlachoff, A. (2013) Bonds step up the game against stocks. Fundweb. January 5, 2013, p29, EBSCO Business Source Corporate Plus [online].