Church House's Campbell-Lamerton: No need to worry about ECB rate rises in 2018

Investors can 'sleep easily'

The scale of distortion in the markets that the European Central Bank has helped create has to be a concern of late. At the last count, about $5trn of negative yielding debt is outstanding.

The 'basis' (the difference in yields between UK rates and US treasuries) continues to widen, and if the UK economy does not go upside down, the chances of a sharp correction in gilts must be increasing. If you are worried about interest rate rises in 2018 you can still sleep easily. The Bank of England has followed the Federal Reserve in rising rates with Governor Mark Carney guiding to two further hikes in the next three years and the Fed eyeing up three hikes in 2018 alone.  It is hard to generate returns or even avoid losses in the bond market when interest rates rise, but ther...