M&G's Riddell: Gilts resilient on Budget and inflation

The UK government bond market has shown resilience in reaction to the Budget and inflation soaring to 4.4% in February, offering a safe haven for investors, says M&G's Mike Riddell.

The manager of the £193m M&G Index-Linked Bond fund says although today's Budget was not particularly "gilt friendly" with more issuance than expected, gilts have rallied and yields are lower than before Tuesday's inflation report. "There is clearly a huge safe haven bid for gilts out there at the moment," says Riddell. "If you think the trend continues and we are heading for a lower growth and higher inflation environment, then index-linked bonds are not a bad asset to own." He says the gilt market sold off on the inflation data release yesterday, which was "deserved" in light of RPI...