In Focus: Fixed income  

BoE's 'honesty' means bonds priced 'largely right'

Simon Holmes, multi-asset portfolio manager at Columbia Threadneedle Investments, agreed.

"The BoE can't fix the energy crisis, government policy has to do that, but it has to do that in a way which causes as few other problems as possible. 

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"And one of the other problems may be that if the government has to issue a lot more debt, and the BoE are meant to be signalling what they are going to do on quantitative tightening, if those two things come at the same time that could cause an additional layer of disruption in the bond market."

Since recording this podcast, on September 8, the government has announced its energy plan, which includes capping average household energy bills at £2,500 a year from October for two years, and six months for businesses. 

The cost of the package will be set out by the chancellor in a statement later this month and will include government borrowing. However the government expects the plan to cut inflation by up to 5 percentage points.

To hear more about what current monetary policy means for the economy and bonds, and why 60:40 is more in a coma than it is dead, click on the link above.