Gilts set to revert to safe haven status

ON BONDS

Insight's April LaRusse believes gilts may revert to functioning as a safe haven from the turmoil in the EU.

Ireland’s woes have certainly rattled global bond markets, including the UK’s. Government bonds had had a good year until mid October, but since then, a combination of better-than-expected economic data, together with the negative headlines surrounding the EU’s peripheral members, notably Ireland, has pushed yields  significantly higher. But where next for the UK fixed income market? Is the sell-off experienced in the past couple of months a harbinger of further trouble on its way? The optimistic view is that investors have been selling UK bonds because they believe that central ba...