Range Of Buy-side Views Evident Post-CPI, Caution Generally Noted

A range of views are evident amongst the buy-side when it comes to Gilts post-CPI, as summarised below:

• Paul Brain, global bond fund manager at Newton Investment Management, said that he had been looking to buy gilts but the sharp rise in core inflation had given him “a bit of pause for thought”. “The market is repricing what the Bank of England will do. We are being hesitant because it takes a while for the shock to feed through into the market view.” That was via the FT.
• Quentin Fitzsimmons, a senior portfolio manager at T Rowe Price, said that he expects the levels seen during the rise in UK yields following the “mini” Budget last year to act as “a magnet.” That was also via the FT.
• “We have gone long duration in our gilt funds for the first time in five years,” said Craig Inches, head of rates and cash at Royal London Asset Management, once again per the FT.
• Finally, RTRS noted that Britain's biggest asset manager, Legal & General, “is staying away from long-term investments in gilts, its chief investment officer said on Thursday. "The inflation data that we got yesterday in the UK will put a lot of pressure on the Bank of England in getting this balancing act right.””