Rathbones sees UK interest rates rising less than markets expect
TLT•Rathbones says UK interest rates are unlikely to reach the market-implied 4.75% by September 2027. It favors avoiding highly leveraged AI companies and holding government bonds, including inflation-linked bonds.
1. Rates and investments
Rathbones said UK interest rates are unlikely to reach the market-implied 4.75% by September 2027. The wealth manager favors avoiding highly leveraged AI companies reliant on debt to fund expansion, as US hyperscalers project spending exceeding $1 trillion annually for three years.
2. Bond allocations
Rathbones said government bond allocations can counter disappointing AI growth and that shorter maturities limit exposure to a fiscal-driven bond market crisis. It also retains inflation-linked government bonds as the unresolved Iran War sustains energy-price risks.
