Gilts' low value says time not yet ripe

Fund manager's comment

In June, the Bank of England raised interest rates by a quarter of a percentage point, building on t...

In June, the Bank of England raised interest rates by a quarter of a percentage point, building on three rises since November. Gilt yields have risen in response and investors may be wondering whether the time is ripe to favour gilts over corporate bonds. Gilts yields do look more attractive than they have done for some time and the market remains well underpinned by institutional investors whose actuaries continue to oversee a shift from equities into fixed income securities. But in real terms, gilts seem relatively poor value. The RPIX inflation measure stood at 2.3% in June and we wo...