(Bloomberg) -- Overseas funds piled into UK government bonds at an unprecedented pace in December, one of the strongest signs yet that a market written off as broken just months ago is on the mend.

Non-residents bought £38.3 billion ($47 billion) of gilts last month, figures published by the Bank of England on Tuesday showed. 

A “portion of the strong December number” likely stemmed from the so-called liability driven investment funds popular with pensions in the UK, and many of which are domiciled in Ireland and Luxembourg, said David Parkinson, sterling rates product manager at RBC Capital Markets.

This class of investors was at the center of a bond-market crisis last year spurred by the prospect of unfunded tax cuts of then Prime Minister Liz Truss’s government. They had to liquidate positions to meet collateral calls, fueling a self-reinforcing cascade of selling that sent the yield on some long-dated gilts to over 5% in September. 

After three straight months of sales, the return of steady buyers of gilts will be a boon to the government as it helps put a lid on borrowing costs. The yield on 30-year gilts was steady at 3.69% on Tuesday.

The Bank of England, which began selling bonds held by its asset purchase facility last year, may also take comfort that demand for the securities is healthy. Its first-ever sale of securities with maturities beyond 20 years this week was oversubscribed 1.65 times. 

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