Chatfeild-Roberts: Gilt yields could plunge below 2%

Jupiter's Merlin multi-manager team has said yields on 10-year UK and US government debt could fall well below existing record lows if markets continue to price in a Japan-style economic outlook.

The team, led by John Chatfeild-Roberts alongside Algy Smith-Maxwell and Peter Lawery, said the European banking crisis began "unfolding at an accelerating pace" in August and a resolution to the saga is needed if benchmark yields are to rise. Yields on 10-year gilts and treasuries have set fresh record lows in recent weeks, of below 2.2% and 1.85% respectively, as investors fret over the prospects for global growth. "Financial markets are well on their way to discounting a Japanese-style economic outcome for the Western world," Chatfeild-Roberts said. "If the Japanese experience i...