From austerity to neutral, and beyond?

Bond yields have risen over the last week. Not by much but by enough to wake up investors to the risks of depressed risk premiums and the dangers of central bank dominance. The policy backdrop might not change materially any time soon but there is enough talk about different policy directions for investors to understand […]

16 September 2016 by Chris Iggo

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Central bankers remain – more or less – in charge of bond markets

Al’right guv? – Central bankers were centre stage in terms of the media this week with Mario Draghi telling reporters at the European Central Bank’s (ECB) post-governing council press conference that he and his colleagues had not discussed extending quantitative easing (QE) in Europe, and Mark Carney telling the Treasury Select Committee that he felt […]

9 September 2016 by Chris Iggo

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Sterling bond investors have done very well, but it’s time to consider the inflation risks

Inflation has been non-existent in the developed world this year but inflation-linked bonds have performed very well in total return terms, and nowhere more so than in the UK. This has been driven mostly by lower real yields, reflecting both the grab for duration and the need to hedge future inflation risks. The returns surely […]

2 September 2016 by Chris Iggo

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Brexit and the phoney war

In September 1939 the UK declared war on Germany.  Immediately after this announcement the air-raid sirens were sounded causing widespread panic in London.  Yet for most Brits the horrors of war were not to become apparent for another 8 months.  This period of unexpected calm became known in the history books as the “phoney war”. […]

1 September 2016 by Steve Herbert

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The Bank restarts the printing presses but will it boost aggregate demand?

Re-starting the printing press – Reading about the Bank of England (BoE) cutting the bank rate to 0.25% and re-starting quantitative easing (QE) while I was away got me re-thinking about the effectiveness of monetary policy and how exactly QE is supposed to deliver higher growth and inflation. It is well understood that the economic […]

22 August 2016 by Chris Iggo

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Pension Freedoms: The long and the short of it…

Last week’s pensions press release by HM Treasury/ HMRC struck a rather triumphalist note even within its title – “Britain’s pension revolution goes from strength to strength” The release went on to proudly state that since April this year “159,000 people have accessed £1.7 billion flexibly from their pension pots”. Impressive numbers I agree, and […]

2 August 2016 by Steve Herbert

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Post Brexit, productivity is key for Britain and employers can help

In January – shortly before the date of the EU referendum was announced – I wrote this article for Mindful Money in which I questioned how UK business would fare in the event of a Brexit decision.  My concern centred on the productivity and engagement deficit of Great Britain when compared to most other members […]

25 July 2016 by Steve Herbert

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Central banks remain key but governments could and should issue long dated debt

News reporters, political analysts and lawyers are certainly the occupations in most demand in this year of surprises. The 2016 ‘Almanac of World Events’ will be a mighty tome. On the whole, events have reinforced feelings of pessimism amongst investors, only lightened by the promise of cheap money forever. But it is not all bad. […]

25 July 2016 by Chris Iggo

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European company bonds still a good bet for fixed income investors

If you’re a risk averse investor chasing income in today’s neverendingly-low interest rate environment, your hunt just got a little bit harder. In the days following the Brexit vote, yields on 10-year UK government bonds (gilts) fell below 1% for the first time in their history1. Yields on 10-year US bonds also went lower, down […]

14 July 2016 by Darius McDermott

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Poor savings rates but you can do better

Savers are genuinely concerned about a possible rate cut from the Bank of England’s Monetary Policy Committee, but many savers are already stuck in poor-paying accounts that would struggle to see interest rates cut any further than they have been. HSBC and First Direct are two of the worst performers, with HSBC’s Flexible Saver paying […]

13 July 2016 by Anna Bowes

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