Bond managers: BoE will backtrack on rate rise guidance

clock •

Fixed income managers have cautioned the Bank of England (BoE) will be forced to backtrack on its forward guidance measures as it has been too pessimistic over the state of the UK economy.

Last week, new BoE governor Mark Carney indicated the Bank will not consider raising interest rates until the unemployment rate falls to 7% (from a current level of 7.8%) – something it does not expect to happen until the second half of 2016. However, bond managers said a combination of better economic data and caveats to the Bank’s guidance are leading to UK rate hike expectations being brought forward. “If you take a look at what the PMI data is indicating, growth could well be a lot stronger than the BoE has predicted, which will force Carney to backtrack on his words,” said Bob Jo...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Fixed Income

James Flintoft: A government and corporate bonds outlook

James Flintoft: A government and corporate bonds outlook

'France's difficulties should not become a verdict on government bonds as a whole'

James Flintoft
clock 09 November 2026 • 4 min read
When growth raises the cost of money

When growth raises the cost of money

‘Clients experience losses differently when they occur in assets held for stability’

Fahad Hassan
clock 27 October 2026 • 6 min read
Where can investors find value in a changing bond market?

Where can investors find value in a changing bond market?

'Bond markets have entered a more demanding phase'

Jeremy Ocansey
clock 07 October 2026 • 4 min read