Government bonds flourish in low growth and inflation environment

A low inflation and low growth environment is expected to remain healthy for global government bonds, says Stewart Cowley, leader of fixed income at Newton. Cowley favours long-dated bonds in the US, UK and Europe because if yields start to fall their reaction is greatest and their capital value goes up more if yields go down. "Growth is declining and debt in the western world is increasing as the consumer has become extremely leveraged. Interest rates should stay low and could decline further as governments cannot afford to risk an increase out of fear of destabilising their economie...