Sterling bonds suffer due to rate rises

Fund manager's comment

The first half of 2004 has clearly been a disappointing period for sterling bond investors. Clearly ...

The first half of 2004 has clearly been a disappointing period for sterling bond investors. Clearly the market has not enjoyed the environment of rising short-term interest rates we have seen here in the UK as well as the start of a tightening in the US. It is a simple fact of life that bond markets do not like interest rate increases, no matter what some commentators say about them boding well for low inflation in the future. Having said that, however, the scale of the sell-off in the market so far this year has been much less than many bears were predicting at the start of it. Talk of...