The UK government is expected to issue an inflation-linked 50-year bond amid the growing demand from institutional investors.

The Debt Management Office has an option to sell a 50-year conventional bond next month. The bond that protects bondholders from iflation may still be sold in the third quarter.

“We recognise the fact that many investors think ultra-long linkers would be even better than a conventional 50-year bond,” said Arnaud Marès, head of portfolio strategy at the DMO.

The move is expected to help the government reduce the cost of funding the country’s rising debt in the time of low-interest rates.