Rising interest rates cast shadow over gilt outlook

An expected increase in the supply of government bonds and rising interest rates is not the best env...

An expected increase in the supply of government bonds and rising interest rates is not the best environment for gilts, says Stephen Snowden, fund manager at Old Mutual Asset Managers. Because of the bleak outlook for gilts, Snowden is keeping the Corporate Bond fund he inherited from Richard Woolnough short in duration. With the first two 25 basis point interest rate rises already imposed by the Bank of England, half of what needs to be done has taken place, he says, adding he does not expect any more than modest 25 basis points raises going forward. "Because we are not expecting a larg...