Britain on Wednesday sold bonds for the first time at a negative yield, meaning investors are paying to own haven sovereign debt as they shelter from coronavirus turmoil.

Bank of England Governor Andrew Bailey poses for a photograph on the first day of his new role at the central bank in London on March 16, 2020. (Photo: AFP)

The UK debt management office said it had raised £3.75 billion ($4.6 billion, 4.2 billion euros) at an average yield of minus 0.0003 percent for bonds maturing in 2023.

That means investors are effectively charged to park their cash in bonds, which are in very high demand as COVID-19 sends the global economy into a dizzying downturn.

The development has sparked debate over negative interest rates from the Bank of England, ahead of testimony due Wednesday from the central bank's governor Andrew Bailey.

In response to the pandemic, the BoE slashed its main interest rate to a record-low 0.1 percent and pumped an extra £200 billion into the UK economy to encourage retail banks to lend to hard-hit businesses.

BoE chief economist Andy Haldane has meanwhile hinted at the possibility of negative interest rates, with Britain set to endure its deepest recession for centuries according to the central bank. 

Britain's economy shrank in the first quarter at the fastest pace since the global financial crisis as the country went into coronavirus lockdown.

The downturn is set to be far worse in the current second quarter, which would officially put the UK in a recession.