Chris Higham and Interest Rate Rise

interest rate rise: Commentators have become increasingly negative in their outlook for bond markets, claiming the "bubble must burst". Against their expectations, government and corporate bond markets have continued to produce positive returns this year, according to The Independent. Mr Higham does not believe we will see a rise to these levels for some time. He expects the first interest rate rise will be considerably more modest and will take place after 2015. He expects inflation will remain low for several years and he points out that present policy is "cheap but tight", meaning while debt is inexpensive, the availability of it is poor. Just look how difficult it is for first time buyers to obtain a mortgage. This is in stark contrast to before the financial crisis where policy was "loose but dear" and US treasuries currently yield close to 2 per cent what a change from the early 1980s when they were yielding in excess of 14 per cent and the Bank of England base rate was 17 per cent. Chris Higham, the manager of the Aviva Strategic Bond Fund, feels investors may be trapped by history. In the past we have seen much higher interest rates, but they have been declining in the UK since as far back as 1990. The current rate of 0.5 per cent has been in place for more than five years and the last interest rate rise was in July 2007. Yet many people are expecting a return to a base rate of at least 4 or 5 per cent. (news.financializer.com). As reported in the news.