Lord Myners warns bond market is 'enormous bubble which will burst'

Lord Myners has branded advice to increase scheme fixed income allocations as "nonsense" and warned the bond market is an "enormous bubble which will burst".

In a speech to local authority funds last week, Myners – a former City minister and fund manager – said schemes are wrong to buy bonds in the current economic climate as long-term interest rates are likely to double over the next four years, a shift that would force down bond prices significantly. He also said inflation will rise due to recent quantitative easing – reducing the real value of the asset class. Myners said: “The bond market in my view is an enormous bubble which will burst.” He added: “I find it an absolute nonsense that your actuaries and your advisers are telling yo...