Skeptical Bond Buyers Go Toe-to-Toe with BOE on U.K. Recovery
- Risks include ‘economic zombification,’ says Aberdeen’s Athey
- Gilt yields have fallen close to those on Japanese bonds
Pedestrians pass the Bank of England in London in May.
Photographer: Simon Dawson/BloombergThis article is for subscribers only.
Investors are so worried about the U.K.’s prospects that they’re ignoring the recent uptick in the economy and betting on an extended period of weakness.
They’ve piled into havens, driving government bonds to record highs. Yields on long-dated bonds dipped below those in Japan, an economy mired in low growth and high debt levels for the last two decades. And traders are again betting on negative rates in 2021, despite the Bank of England saying that officials didn’t discuss the monetary policy at their meeting last month.