Stronger growth results in bleak outlook for gilts

It has been a tough year for UK bond investors and the outlook is only getting tougher, with the short end of the gilt market worried about stronger growth and asset price inflation and the long end under severe downward pressure due to the projected lack of supply of long-dated bonds Last year there was a strong move into bonds as the Bank of England's Monetary Policy Committee (MPC) instigated a series of overdue interest rate cuts, reaching a low of 5%. But evidence of economic recovery has reignited fears about inflation and the MPC has turned rapidly more hawkish It decided not to ac...