The UK fixed income market is experiencing volatility amid economic and fiscal challenges. 

Gilt yields remain elevated due to lingering inflation, currently at 2.5 per cent, and weak GDP growth – 0.1 per cent in November 2024. 

A cautious Bank of England has also pared back on the number of rate reductions it plans to make this year, while concerns over stagflation and government deficits remain.

High yields offer attractive income opportunities for new investors, but existing bondholders face potential losses if selling before maturity. 

This means that it is important to balance credit and duration risks.

Meanwhile, green and social bonds, despite political headwinds, continue to attract ESG-conscious investors seeking sustainability-driven returns. 

However, scrutiny is crucial to avoid greenwashing risks.

This guide, which is worth 60 minutes of CPD, will explore how gilt yields are reshaping the fixed income market; how investors can balance risk and duration; and how advisers can help their fixed income investment clients in uncertain times.

ima.jacksonobot@ft.com