Wednesday, January 21, 2015
UK yields collapse below base rate. Cuts to follow.
Expectations are now of a rise in 2015, but Gilt yields have collapsed to 0.35% on 2yr notes indicating market expectations moving towards a rate cut. I expect a cut to 0.25% as inflation drops to zero or a panic 0.5% cut to 0% with deflation, Danish ERM collapse and ECB QE causing a stampede into Sterling.