PIMCO's sterling portfolio head Mike Amey believes the 30-year bull market in UK gilts is dead and has shifted his focus towards emerging market currencies.
Amey said gilt yields have been kept artificially stable on the back of the BoE and commercial banks being “forced buyers”, with banks owning 30% of the market. The manager, who heads up the PIMCO Select UK fund, added in an environment of rising inflation, coinciding with record low interest rates, gilts are depressed and will produce a zero real return. “The BoE and the government have seemed to accept that growth is going to be low, and this is why they are keeping interest rates at 0.5%. They are tolerating the high levels of inflation as the price they have to pay for the low gro...
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