The case for the UK

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Investors like trends that work in their favour, and UK gilts have started the year with momentum firmly on their side. Yields have fallen across the curve, offering welcome relief after the bruising experience of last year, when yields reached multi-decade highs.

Over the past three months, the 30-year gilt has outperformed the equivalent US Treasury by around 60bp.But through the last 30 years, the average spread between UK and US long-dated yields has been around -30bp, meaning gilts have typically yielded less than Treasuries.

So what has changed?