Spreadbury: Expect to see 10-year gilts yield less than 1%

Fidelity's Ian Spreadbury has tipped the yield on a 10-year gilt to dip below 1%, as the safe haven government bond saw yields hit a new low today.

The manager of the Fidelity Strategic Bond and Money Builder Income funds (pictured) said the ongoing trauma in the eurozone is likely to see yields on government debt from the strongest European nations to fall in the short term. Today the yield on 10-year UK government bond hit a new low of 1.71% while the 10-year bund dropped to 1.34%. In contrast, Spain and Italy saw their borrowing costs shoot up on fears over the banking sector and an imminent debt auction. “In the near term, the problems in the eurozone could well cause gilt yields to grind lower, but at these levels I see lim...