Income from bonds still highly prized

corporate bonds

A continuing demand for yield on bonds has led to the asset class being supported. However, further rate rises will combine with negative news to make bonds perform less well next year

The recent rate rise is no one-off. Interest rates are now on the up, but the real question mark lies over how far and how fast? The answers to these questions will determine the outlook for bond investors. We know from the last Monetary Policy Committee (MPC) minutes that four of the nine members were keen to raise interest rates nine weeks ago. Since then, economic news has been generally strong, so it came as a surprise to no one when the MPC increased the base rate by 25 basis points in their most recent meeting. But be warned, this action does not represent a one off increase. Afte...