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Gilts Seen As Rising Despite Inflation "blip"

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David Milliken, 8:17, Wednesday 19 January 2011
) - The shock rise in inflation on Tuesday is more likely to help than hinder its auction of benchmark 25-year government bonds later on Wednesday, as the gilt now offers the best yield in eight months.
Strategists say the gilt is cheap compared to other similar British government bonds, and the UK has suffered none of the auction jitters that have plagued Portugal, Greece and Ireland (Berlin: IIK.BE - news) despite its high public sector deficit.
The Debt Management Office is offering 2.25 billion pounds of the 4.25 percent March 2036 gilt, just a day after government bond prices slid after investors brought forward estimates of when the Bank of England would first raise rates this year.

So far, so good for the UK. As long as house prices hold nothing will dent our bonds, stocks, currency.....

Bonds are the most important leading indicator of where we are going with regard to IR and inflation policies. So far, the market is saying no to inflation and no to IR hikes.

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Yesterday's inflation figures didn't dent Sterling, in fact against everything bar the Euro it was up on the day. The twisted logic of these things does somewhat baffle me, but my take on it is that the market expects that the BofE will be raise interest rates sooner rather than later.

I can't see how one month's inflation figures could make a substantial difference to anyone's decision to buy 25 year bonds but hey what do I know

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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