Robin's Round-Up of Financial Data for February 2009

Yields on gilts redeeming in 2009 and 2010 imply the base rate of interest will drop down to around 1.0% and remain there for a year or so. Thereafter interest rates may rise quite rapidly. The difference between LIBOR and the base rate remains much reduced implying some of the government's special measures are continuing to work. CPI and RPI both continue to drop thanks to lower oil prices and mortgage rates, and are expected to keep going down, the RPI having experienced its largest ever drop over 1 month. Long dated gilt yields (upon which annuity rates are based) remain below 5% and at historically low levels.  According to our straw poll of fund management groups, asset classes in favour are UK Fixed Interest (particularly corporate bonds), American shares and Japanese shares.

 

Bank of England base rate of interest						1.50% pa
Short dated gilts (redemption yields)		8.00% Treasury Stock 2009 redeeming 25-09-2009				1.04% pa
		6.25% Treasury Stock 2010 redeeming 25-11-2010				1.06% pa
		3.25% Treasury Gilt 2011 redeeming 07-12-2011				2.07% pa
		9.00% Treasury Stock 2012 redeeming 06-08-2012				2.40% pa
Long dated gilts (red yields)		5.00% Treasury Stock 2025 redeeming 07-03-2025				4.43% pa
London Inter-Bank Offered Rate		LIBOR 1 WEEK				2.05% pa
		LIBOR 1 MONTH				2.17% pa
		LIBOR 3 MONTHS				2.77% pa
		LIBOR 6 MONTHS				2.96% pa
		LIBOR 12 MONTHS				3.07% pa
Consumer Price Inflation (CPI)						3.10% pa
Retail Prices Index (RPI)						0.90% pa
National Savings & Investments		3 Yr Index-Linked Savings Certs offering RPI +				1.00% pa
		5 Yr Index-Linked Savings Certs offering RPI +				1.00% pa
Fund Managers – Current House Views on Different Asset Classes
Asset Class	Positive	Slightly Positive	Neutral	Slightly Negative	Negative		Total Views Offered
Cash			1	2			3
Property				1	1		2
UK Fixed Interest		2	2		1		5
Overseas Fixed Interest		1		1			2
UK shares		1	3	1			5
European shares		1		3	1		5
American shares	1	3	1				5
Japanese shares		3	2				5
Pacific (ex Japan) shares		1	1	1	1		4

 

Data gathered on 2 February 2009. All figures given to 2 decimal places. Participating fund managers: BlackRock, Gartmore, F&C, Schroders, Standard Life.   DISCLAIMER Please note, whilst every effort has been made to ensure the information contained in this document is correct, sometimes the information given to us by third parties is inaccurate. We cannot therefore be held responsible for the accuracy of this information and it should not be relied upon for making any decisions.