Have gilts lost their role as portfolio diversifiers?

Things are not always what they seem – Plato UK gilts have traditionally occupied a core role within diversified portfolios as a defensive asset – offering stability, liquidity and protection during periods of economic stress.  Lately, the combination of rising fiscal pressures, persistent inflation, elevated volatility and growing political uncertainty is increasingly challenging that assumption.  While higher yields have improved headline income potential, they also reflect materially greater risks surrounding government borrowing, inflation and debt sustainability.  In a po...