Join our community of smart investors

Markets and your money: Banks are back

Bonds continue to slide and banks lead equities as a US rate rise looms
November 3, 2016

It's been a long time coming but a change is gonna come. Sam Cooke was unlikely to have been talking about fixed interest, but he might as well have been. Bond yields continued to head upwards in October, reversing decades of rising prices. Elsewhere inflation finally arrived on the UK scene and banks are looking more appealing again, particularly with a US rate rise on the cards.

Finally inflation has ticked up in the UK, driven by plunging sterling since the UK's vote to leave the EU. The Bank of England has been targeting 2 per cent inflation to no avail. But last month we learnt that in September consumer price inflation rose more than expected, by 1 per cent.

Meanwhile, another measure of inflation expectations, the five-year break-even inflation rate, is now at its highest in two years.

To continue reading...
REGISTER FOR FREE TODAY
  • Read 3 articles for free each month
  • Educational articles and topical investment guides
  • In-depth podcast episodes by our writers and industry professionals
  • Interactive live webinars on investment themes that matter
Have an account? Sign in