About a quarter of the global issue of government bonds issued around the world offer negative yields, the Luxembourg Times report.

For fixed-income investors such as pension funds, this appears to be the “new normal” both in Europe and in Japan.

Both the German and the British economy have seen negative growth over the second quarter of 2019. For Germany, there has been a slump in exports, as its manufacturers bore the brunt of a global slowdown amplified by tariffs. For the UK, there has been a standstill in business investment linked to uncertainty over Brexit. If there are similar results in the third quarter, Europe’s two biggest economies will be in officially in recession.

With inflation well below the 2% target in the Eurozone and a slowdown of the economy in the UK, central banks have essentially reversed a policy of monetary tightening. The same is true of Switzerland, Denmark, Sweden, Poland, the Czech Republic, and Hungary. Globally, bonds worth $15tn are trading with negative yields, which means investors are paying states for the privilege to lend them.

The knock-on effect is that banks are providing zero-to-negative yields on a savings account, which could see investors reverting to private vaults rather than accept negative rates.