Pimco, the world’s second largest bond house, has reversed its aggressive stance against the UK gilts, saying: “We do not expect the UK to fail in meeting its commitments”. For sophisticated investors, Pimco added: “We believe exposure to the UK in the credit default swap (CDS) market offers a valuable opportunity.”
The comments from Mike Amey, an executive vice-president, are in stark contrast to a warning at the start of the year from managing director Bill Gross that UK gilts were “resting on a bed of nitroglycerine” as a result of the nation’s high debt levels. In April, Mr Gross reiterated that Britain remained on its list of “must avoid” countries with Greece.
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