Rate cut will have little impact on bond prices

The consensus among fixed income managers is that the UK's first interest rate cut of the cycle will...

The consensus among fixed income managers is that the UK's first interest rate cut of the cycle will have little immediate impact on the bond markets. The economists' view is that the move was primarily designed as insurance against a consumer slowdown. Ian Kernohan, chief economist at Royal London Asset Management, says the cut should stop a chain reaction in the markets. "The cut in interest rates was expected and should not have a major impact on bond prices," he says. "The Monetary Policy Committee of the Bank of England has taken out insurance against the consumer slowdown feedi...