Why productivity matters

Chris Dillow

Chris Dillow
Why productivity matters

Why are index-linked gilt yields so low - even negative for longer maturities? One good reason is simple maths. A combination of the global savings glut and shortage of safe assets, quantitative easing (QE) and investors' risk aversion are keeping nominal gilt yields low - if not as low as a few weeks ago - while inflation expectations haven't fallen so far, in part because of QE. Because index-linked yields are equal to nominal yields minus the breakeven inflation rate, it follows that they must be low.

To continue reading, register today

to enjoy limited access to the following:

  • Daily trading news
  • Funds coverage
  • Features on big investment themes
  • Comprehensive companies coverage
  • Economic analysis
Subscribe to Investors Chronicle

Related topics

Subscribe today

Full access for just £3.37 a week:

• Tips and recommendations - to beat the market 
• Portfolio clinic & Mr Bearbull - build a well-planned portfolio 
• Expert tools - track and manage investments effortlessly
• Plus free delivery to your home or office

Subscribe Now