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City File: Bank of England

Saturday 16 October 1993 18:02 EDT
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WHILE the equity markets went bananas on Friday, gilts were looking merely smug at the news that the Bank of England's next tranche of gilt- edged, due out next week, would be redeemable between 1997 and 2001. Yet as Ian Shepherdson of Midland Global Markets points out, five-year gilts, in theory affected by the new issue, performed better than longer-dated stocks last week. Midland has led the bulls on gilts all year and made money for their followers, so Mr Shepherdson's prophecies could carry weight. The Bank has a mere pounds 11bn left to fund this year, most of which could be accounted for this week. He sees base rates down to 4 per cent by the year-end and is a stronger bull of index-linked than of the fashionable shorter stocks.

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