Morningstar Investment Conference: 'We are nowhere near finished in terms of interest rate hikes'

UK base rate priced at 3.5% in one year

Fixed income markets are pricing in a 3.5% base rate from the Bank of England, predicting there is a long runway of rate hikes to come.

At Morningstar's 2022 Investment Conference, head of fixed income at Royal London Asset Management Jonathan Platt told delegates that in an environment where bonds have been broadly returning in-line with equities, managers were now contemplating the role of fixed income in portfolios. According to Platt, markets are pricing in a 25bps hike to the UK base rate by August, and predicts it will have risen to 3.5% in a year from now, equivalent to nine base rate increases of 25bps, with the situation being markedly similar with the Fed funds rate in the US.  "Fixed income markets are sayi...