Yields in bond markets worldwide rose markedly in 1994, reversing much of the previous year’s rally. In part the rise reflected faster economic growth in the major economies, accompanied by heightened uncertainty about the outlook for inflation—though other factors were also at work. Trading conditions were occasionally turbulent in the spring, as portfolio adjustments were made. Despite this unfavourable background, gilt-edged funding was successfully maintained. This article, which continues the annual series begun in 1989, describes gilt sales and market turnover, as well as developments in related derivatives markets and the business of the gilt-edged market-makers during 1994.