Gilt prices rose further, pushing the 10-year Gilt yield to 2.54%, in response to Bank of England Governor Mark Carney’s warning that the UK economy is not yet mended and that he envisages interest rates staying lower for longer. Drawing an analogy with the upcoming World Cup in Brazil, he said the “Securing the recovery is like making it through the qualifying rounds. That is an achievement but not the ultimate goal”. The market pushed back the timing of a rate rise from March 2015 to right about the time of the election. This strikes us as overly cautious because it runs the risk of the Bank of England appearing politically aligned when, by 2015 and with GDP up and unemployment falling, the bias would surely be on a rate rise in early 2015.