Three reasons why Britain will not face a Japanese decade

ON BONDS

PETER HARVEY, fund manager at Cazenove on Bonds

This is turning out to be a good year for contrarians. At the start of 2010, everyone was bearish on government securities, but the market has delivered precisely against expectations. In the first eight months, gilts, bunds and treasuries returned +10.7%, +10.4% and +8.8% respectively, as lower inflation and sluggish growth became the central scenario for most economic forecasters. As a credit fund manager, I try to avoid rash calls on duration. The government bond market is a liquid and efficient one, with little room to add value. But, as five-year treasury yields approach 1.3% per...