Spreadbury and Gartside tip government bond yields to rise

Tapering panic has driven a major sell-off in government bond markets over the last month, but bond investors suggest there is scope for yields to go even higher from here.

Yields on UK and US 10-year government bonds rose to fresh two-year highs as selling pressure on bonds continues to mount amid the possibility the Federal Reserve could begin to wind down its stimulus as early as September. The yield on a 10-year gilt rose to 2.739%, a level not seen since August 2011. In the space of a month, gilt yields have risen from 2.3% to hit yesterday's level. Meanwhile, US treasury yields hit a high last seen in July 2011, reaching 2.864%. Fidelity's Ian Spreadbury (pictured), manager of the group's Strategic Bond fund, said although the upswing was a bit ...