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BoE's Bailey says his message is not that rates are set to rise

BY Reuters | ECONOMIC | 08:17 AM EDT

LONDON, April 30 (Reuters) - Bank of England Governor Andrew Bailey said his message was not that interest rates were set to rise in future, as he set out scenarios for the economic impact of the Iran war including one which could require a "forceful" increase in borrowing costs.

"It is not the case that we're sort of giving some sort of slightly clandestine message that interest rates are going to go up," he told a press conference on Thursday. (Reporting by William Schomberg, David Milliken and Suban Abdulla, writing by Sarah Young; editing by William James)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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