Woolnough: What Moody's downgrade threat means for gilts

M&G Investments' bond manager Richard Woolnough has backed gilts to shrug-off Moody's downgrade warning released earlier this week.

Woolnough, manager of the £5.3bn Optimal Income fund as well as a number of other portfolios, said with only moody's putting the UK on notice, yields should remain fairly steady. He expects gilt yields to remain unchanged by the news, adding the overall increase in probability of a gilt default stands at just 0.17%. He said: "The risk of default on gilts would remain to all intents and purposes unchanged." Woolnough was responding to fears UK government bonds could sell-off if investors got spooked by the warning from Moody's. The credit rating agency has placed the UK's coveted...