Mr Eakins said: “Yields may still move higher despite the Bank of England pause, but we expect that the majority of rate rises from the central bank are now done.”
Blackrock, the world’s biggest money manager, has also started buying more gilts.
Vivek Paul, senior strategist at the Blackrock Investment Institute, said it had upgraded its view of UK bonds “just a few weeks ago” and was telling clients to snap up government debt over the next 12 months.
Soaring gilt returns have lured some of the biggest funds into snapping up UK debt in recent months as inflation has stabilised.
Nest, Britain’s largest pension scheme, recently said it would also start buying gilts for the first time in years amid signs that inflation is coming down.
Andrew Balls, chief investment officer for global fixed income at Pimco, said gilts were “pretty attractive” relative to US Treasuries.
The yield on a 10-year gilt stood at 4.57pc on Friday, compared to 4.78pc for a 10-year Treasury. While the US notes pay a higher rate of return, investors are less convinced that inflation there is under control and are therefore concerned that higher interest rates will eat into their profits.
Mr Balls said: “If you’re getting gilt yields at 4.5pc, this still looks pretty attractive given the range of risks to the outlook.”
