La migliore performance delle obbligazioni britanniche in due anni sta conquistando gli investitori globali

Blimey, UK bonds doing well? That’s brilliant! Nothing says “we’ve got our act together” quite like global investors looking at Westminster and thinking “yeah, we’ll have a punt on that lot.” Next thing you know, the pound might actually buy you a Freddo again!

I was going to comment that it’s due to the concerns about an AI bubble which is making fixed income a good investment.

But that doesn’t check out, UK bonds had a straight fall whilst other nations are more volatile.

I think it’s down to the fiscal and monetary results – wage growth is slowing and that’s helping inflation rates. There’s a sense of normality returning.

The bond performance is even better considering the falling UK pound valuation falling as it impacts foreign returns

Still theres a lot of risks with the budget and whilst its easy fiscally to balance the books, theres a lot of political risks.

Of course bonds are going to be doing well while interest rates fall. That’s what always happens.

Interest rates were much higher two years ago.

While interest rates continue to settle investors will move to bonds. When they’re rising the investors will buy shares. Investors (speculators) are currently buying UK bonds because interest rates are expected to continue to fall.

Fun fact: No CGT for bond speculators.

It is good news, but only a tiny dose of it – yields are still 4.4% which is pretty high by 21st century standards, and still higher than our economic comparator nations. The trend is in the right direction though.