Why gilts have run out of excuses

Article Abstract:

Yields for long-term United Kingdom government securities (gilts) have stayed low although inflation indicators show rising inflation. Low long gilt yields have been justified by European monetary union, which may push down UK interest rates, and by the Bank of England's control of interest rates, seen as likely to lead to lower inflation. Yields may have dropped too far in the UK and by some measures they have dropped below yields in Germany and the US. They may be artificially low simply because pension funds are purchasing gilts, boosting demand, while supply is low since there are no issues of long gilts in 1998.

Interest Rates

---

UK gilts: high spirits

Article Abstract:

UK government securities (gilts) are seeing a drop in yields partly due to domestic factors such as hopes that government borrowing may drop. There has also been a rise in government bond prices world wide, which is benefitingthe UK. There is concern that there is an element of speculation and that prices could drop before summer 1997. HSBC Markets, in contrast, forecasts lower inflation due to a strong pound sterling, which will help reduce gilt yields. Expectations that UK interest rates are set to rise will have to ease if gilts are to rise.

---

Gilts market bulls escape the cull

Article Abstract:

Yields for long-dates UK government securities (gilts) have dropped in Nov 1996 despite inflation and interest rates having risen and there being concern that fiscal policy could loosen. Gilts have been helped by a drop in US bond yields and a drop in UK government borrowing which looks set to drop as tax reveneue increases with economic growth. Some analysts see UK interest rates as likely to rise in Dec 1996 and fear that international yields could increase.

Similar abstracts:

• Abstracts: Windfalls all round for carpet baggers. Sting in the bonus tail. Savings rates: income threat
• Abstracts: Modern Russia: more bull than bear. On the edge
• Abstracts: Is 3-D in your marketing plan? Get ready, because VRML 2.0 will reshape the Web. Next wave: push to the desktop
• Abstracts: Global roundtable: marketers talk about their challenges, goals. Include speeches in marketing mix
• Abstracts: How to cut your mortgage costs. The mortgage gamble that is getting ever harder to call. Base rate falls leave borrowers with a dilemma

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.