Will bond markets falter when rates rise?

FIXED INCOME

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David Scammell, senior bond fund manager, UK fixed income, at Santander Asset Management, says the Bank of England's 'rocky road' to rate rises is not off to a good start

One of the more endearing stories in Greek mythology concerns that of Theseus, who was forced to enter a dark labyrinth in order to slay the dreaded Minotaur. The path was uncertain and the journey fraught with unknown dangers. In many respects the Bank of England, as it inches forward along the inevitable path of higher rates, will face similar demons, and bond investors will also need to appreciate the risks if they too are to avoid the monster's jaws. Not only is it unclear how households and corporates will respond to a move away from an extraordinary low rates policy, but global ...

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