Gilts Are Overpriced On UK Rate Cut Hopes

Gilts Are Overpriced On UK Rate Cut Hopes - at www.moneyweek.com - the best of the international financial media

We are currently taking a cautious approach to the gilt market because we believe the market's continued expectations of further official interest rate reductions after the August cut are too ambitious.

We believe the August cut was largely an insurance move in response to sharp declines in household consumption during 2004 and was understandable in light of the subsequent downward revisions to GDP growth contained in the annual Bank of England Blue Book.'

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