Mixed outlook for gilts over next year

Fund manager's comment

The outlook for the gilt market over the next year or so can best be described as mixed. On the ne...

The outlook for the gilt market over the next year or so can best be described as mixed. On the negative side, the government is getting into a mess with its finances and will be in no hurry to cut spending or raise taxes this side of the general election. This will almost certainly involve a larger increase in the supply of gilts than was originally intended, which has bearish implications for the level of gilt prices. On the positive side, new legislation from Brussels concerning solvency requirements for all European insurance companies will increase pressure on UK insurance compan...