Bonds struggle as base rate hovers around 5%

UK base rates could fall below 5% for the first time in almost 30 years, according to Gerrard, while US rates have yet to hit the bottom. Recent data shows that there is still uncertainty over a recovery in the US market and, as such, the Bank of England may choose to take further insurance over the coming months, says Mike Lenhoff, chief portfolio strategist at Gerrard. The UK equity market was boosted by the unexpected base rate cut on 2 August, which caused a corresponding fall in bond yields. Lenhoff says there has been a noticeable flattening in the gilt yield curve as yields in t...