interest rate

It would be an understatement to say it has been an interesting and, in many ways, frustrating recent period for bond managers.

Bank of England Governor Mark Carney will this week set out his long-awaited strategy for interest rates with a set of policies designed to reassure borrowers rates will stay low for many months to come.

The Bank of England (BoE) has held interest rates for the 53rd consecutive month and opted not to increase the size of its £375bn QE programme at its July meeting.

RWC managers Peter Allwright and Stuart Frost have left the company and their Cautious Absolute Rate and Currency fund has been put under review by the group.

The Bank of England has said market expectations of future rate rises are "not warranted", sparking a drop in sterling and a 50 point jump in the FTSE 100.

Reducing the base rate from its current historical low of 0.5% into negative territory "remains an option" for the Bank of England's Monetary Policy Committee (MPC), deputy governor Charles Bean has said.

A dramatic shift in the outlook for interest rates has been seen with money market indicators now pricing in a base rate rise in the UK to 0.75% in two years' time rather than three.

National Savings & Investments (NS&I) is reducing the interest rates on its income bonds, Direct Saver and Direct ISA from September, in response to the ongoing low interest rate environment.

Kames Capital is planning to launch an "aggressive" rates fund to prepare for an eventual increase in interest rates on government bonds.

Mervyn King, the outgoing governor of the Bank of England, has been tipped to give the Chancellor a helpful boost this week by upgrading growth prospects for the embattled UK economy.