UK market is expensive compared with Europe

After a rally in 10-year gilts there are now a number of managers looking to take profits. Yields have fallen to around 5.3% from 5.85% in mid-January and Joe McKenna, fixed interest investment manager at Britannic Asset Management is looking to switch into three year gilts, now yielding 6.32% and 15 year gilts which are yielding 4.93%. McKenna says: "UK gilts are very expensive compared to European issues such as German bunds but there is some justification for this There is not that much supply in the UK gilt market and on average UK inflation is 1% plus below European levels. "UK eco...