Better long-term value outside UK bonds

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The current UK yield curve is sharply inverted, in marked contrast to the Euroland bond markets. Sho...

The current UK yield curve is sharply inverted, in marked contrast to the Euroland bond markets. Short-dated gilts offer a yield of around 6%, whereas their long-dated counterparts offer a meagre 4.25%. In Euroland, long bonds yield around 5.5%. What has caused this disparity to occur? Is there any value left in long gilts? UK bonds have generally lost ground throughout 1999 as concerns over higher global inflation have increased on the back of continued strong US economic growth allied to recovery in the rest of the world. Short-dated gilts bore the brunt of the pain, as uncertainty ove...

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