Evidence of UK slowdown emerging

Government bond yields are now some way off their tight levels of late July. UK data continues to co...

Government bond yields are now some way off their tight levels of late July. UK data continues to contrast with the rest of the world, particularly the US and Japan. Clear evidence is emerging here of a slowdown, especially in consumer related spending, and further interest rate cuts will be needed to stimulate the economy. Although the UK is geographically an island, it is not the same case when it comes to correlation in the capital markets. Thus, US Treasury yields moving from 4% to 4.5% have pushed gilt yields higher. Currently, 10-year gilt yields are just shy of 4.4%. A fair val...