OMAM's Johnson: Managing for ‘recession-lite'

OMAM's Christine Johnson explains why low growth and gradual disinflation will be good for fixed cashflows, and what this means for corporate bond investors.

I do not wish to make worse what has been a generally gloomy New Year, but it is our central scenario that either the UK goes into recession in 2012 or that we trundle along with a weak economy. If it is not technically recession, it may be the next worst thing, a negative quarter then a positive quarter then another negative quarter. What will this mean for investors in sterling corporate bonds? At a policy level, the Bank of England has been very clear that it is happy with quantitative easing and if it sees further weakness in the economy there will be more of it. That will impact ...