Robert Stheeman, head of the UK Debt Management Office, said the picture has brightened so much over the last year that gilts have benefited from "safe-haven flows".
"The trajectory of the declining deficit and financing requirement over the next years has clearly given markets a lot of reassurance over the last months," he told a Euromoney bond conference in London. "We were on negative watch by Standard & Poor's and we are no longer on negative watch."
Mr Stheeman said the average maturity of the UK public debt is 13.5 years, by far the longest in the OECD club. "The fact that we have this undoubtedly helped us," he said.
Mr Stheeman was careful not to take sides on the bitter dispute between the Coalition and Labour over the pace of fiscal tightening.
Ed Balls, the Shadow Chancellor, has accused the Government of repeating the "mistake" of Margaret Thatcher's austerity policies after the 1979 oil shock, draining £13bn with a VAT rise just as the economy gasps for air.
However, it is clear that Britain was close to the precipice in early 2010, when investors feared political paralysis. Bill Gross, head of the bond fund PIMCO, said gilts were "resting on a bed of nitroglycerine."
Mr Stheeman said it was too early to sound the all clear. "I would not want to give the impression of complacency. We are conscious that we still have to issue very large sums of debt compared to a few years ago."
Separately, it emerged yesterday that the $237bn PIMCO Total Return fund had cut its holdings of US government-related debt to zero for the first time since early 2008, highlighting investor expectations of rising interest rates.
The move follows warnings by Mr Gross that bond yields were set to rise as the US Federal Reserve comes towards the end of its quantitative easing programme.
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