Mike Riddell on Bonds: No Sign of a UK Gilts Crisis
According to Mike Riddell, portfolio manager of the Fidelity Strategic Bond fund, there is no sign of a UK gilts crisis yet.
Despite recent headlines about 30-year UK government bond yields hitting their highest levels since the late 1990s, Riddell remains bullish on UK government bonds.
A comparison of borrowing costs on 30-year sovereign bonds across countries reveals two key points:
- developed market government bond yields tend to be closely correlated globally
- long-dated gilt yields have not risen as much as in Japan, Germany, or France this year
The increase in 30-year gilt yields since the end of May 2023 is almost identical to the increase in borrowing costs seen in Germany, France, and the US, and less than the jump in Japanese borrowing costs.
No sign of a UK gilts crisis yet.
Author summary: Mike Riddell explains why he is bullish on UK government bonds.