FRED just added an exciting new dataset from the Bank of England: Three Centuries of Macroeconomic Data in the United Kingdom. It provides, among many others, a series on the yields of consols. These are bonds without a maturity date. Pardon? Well, that means there’s no scheduled date for final redemption, until the government decides to pay it back, and coupon payments are made until that time. Consols were first introduced in 1751 at 3.5% and have been in circulation ever since, although interest rates have varied. In 2015, the British government decided to redeem all consols in circulation.
A consol is like a stock, in that it last forever…or until the debtor decides to buy it back. However, consols have a fixed interest rate, while stocks have varying dividends. Consols are also considered to be bonds and thus have seniority over stocks in cases of bankruptcy. Another unconventional debt instrument that comes close to consols is the 100-year mortgage introduced in Japan in the 1980s to try to make homes more affordable.
How this graph was created: Search for “consol” and you should find the series among the first results.
Suggested by Christian Zimmermann.