Investors who want to be saving money are being urged to invest in short-term UK savings bonds.
US savings bond investment group Pimco suggested that investors might see better returns by saving money in short-term UK savings bonds than in longer-term savings bonds.
Mike Amey, senior vice president of the investment group told Reuters: "Long UK yields remain poor value when compared with the rest of the UK yield curve."
He said long-term UK savings bonds offer poorer savings returns when compared with long-term savings bonds offered by other countries around Europe.
These comments come amid high expectations that the Bank of England's Monetary Policy Committee (MPC) will vote to cut interest rates this month. The current interest rate is 4.75 per cent, and analysts believe that it will be reduced to 4.50 per cent at the MPC's next meeting on Thursday.
But Mr Amey said that even if interest rates are reduced on short-term savings bonds, the same will not necessarily be the case with longer-dated savings bonds.
"As an investor, the longer you lend your money the lower the rate of interest you receive," he said.
Pimco: Investors get better returns from short-term savings bonds
Pimco: Investors get better returns from short-term savings bonds
Tue, 02 Aug 2005
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