Fidelity's Spreadbury: UK 'cannot handle' higher gilt yields

Fidelity's Ian Spreadbury has warned the UK economy would be unable to handle higher gilt yields, and expects incoming governor Mark Carney to push for more stimulus to keep prices stable.

Spreadbury said the recent "violent sell-off" in core government bonds shows how volatile the asset class can be, and predicted there could be further sharp upward moves in bond yields. Core government bond markets have been volatile of late as investors try to second guess central banks' next move on quantitative easing. The Bank of America Merrill Lynch Global Bond Market Index fell 1.5% last month, its largest loss since April 2004, with 'safe haven' sovereign debt particularly affected. In the US, investors beginning to position for an eventual 'tapering' of quantitative easing...