Executive summary

The past 18 months has seen the biggest bond bear market in almost 50 years. In this Spotlight, we explain why bond prices have fallen as much as they have, how this bear market compares with other downturns over the past 50 years, the chances of interest rates or inflation going much higher than current levels, and what returns and volatility we are likely to see going ahead.

• Bonds fall in price when bond yields go up - Government bonds are essentially term deposits (TDs) issued by the government. The key difference between the two is that bonds are subject to ...