How dangerous this one turns out to be remains to be seen but it has certainly caused worries about the effect it, and associated restrictions, might have on growth projections or plans of central banks. Those plans remain a bit hazy especially when it comes to the Bank of England but with a current CPI of 4.2%, forecast to rise to 5% in short order, the MPC has no room for complacency.

The combination of variant volatility and the Bank’s decision not to satisfy market expectations did slow issuance into Sterling but a handful of issues priced with relative ease. We switched out of some CIBC short dated floaters into a new issue covered 2025 FRN from DBS Bank paying a healthy SONIA +100bp. We sold the last of our Heathrow Funding 28’s, fortunately ahead of a little travel restriction related widening and cleared out the balance of our Credit Agricole T2’s. We reduced some of our mainstream infrastructure exposure, selling some HICL and GCP.

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