Bootle warns of 'bond bloodbath'

Independent City economist Roger Bootle has warned gilts are not a safe bet in the present environment, despite record low yields.

Speaking at a conference today, the Capital Economics managing director said: "My forecast for ten-year gilt yields is currently 2.8%. Bonds at this level are extremely risky as they will eventually rise causing a bond bloodbath." Bootle also says soaring inflation fears are unfounded and UK CPI will 'collapse' by 2013. He expects inflation to fall "below 0%" within three years, and dismisses recent reports interest rates could soar to 8% by next year. "If anyone thinks interest rates will rise to 8% next year they can see me about it. I will offer it to them as a both ways bet! It...