City Financial: inflationary fears overdone

With two-year gilt yields having risen from 4.4pc to 5pc in May - while 30-year yields rose by only 15 bps to 4.6pc - Williams believes we have seen a rise in short-dated yields, but hardly any increase in long-dated yields. He said: "If the market was worried about inflation, we'd have seen the opposite." Interest rates do not therefore need to be hiked, said Williams, who manages the City Financial Strategic Gilt fund. Moreover, he sees recession as the greater threat and its rising possibility leads him to be bullish on gilts. He asserted: "It would be very hard to have a recess...