Why the country with great political turmoil still has the best bonds to buy

MarketWatch argues that U.K. gilts look attractive relative to U.S. Treasurys, German bunds, and Japanese government bonds because the market may be overpricing Bank of England tightening while underestimating slowing U.K. growth. TS Lombard’s Daniel von Ahlen says the U.K. economy is losing momentum, wage growth has slowed back to pre-COVID levels, and inflation pressures from energy costs have not become entrenched. He expects the BoE could cut rates next year, supporting lower gilt yields. By contrast, he sees the U.S. labor market as strong enough to keep the Federal Reserve hawkish, and he thinks German and Japanese yields may remain firmer due to ECB tightening and persistent wage-driven inflation. The article’s market implication is a relative-value bullish case for U.K. government bonds versus peers.