Fixed Income Bonds and Current Market Conditions in March 2026

Interview with Michael Goldman: Navigating Bonds in a Volatile UK Market By David Wilson, Fixed Income Advisor at Welford Capital | March 2026

In this first instalment of our expert conversation series, I sat down with Michael Goldman, Financial Advisor at Kingston Funds in London, to discuss fixed income opportunities and challenges. With the Bank of England holding rates at 3.75% and geopolitical tensions pushing energy prices higher, bond markets are reacting with elevated gilt yields.

David Wilson: Michael, thank you for joining us on the Welford Capital blog. Let’s start with the big picture. How are current market conditions affecting fixed income bonds here in the UK?

Michael Goldman: Thanks, David. It’s a fascinating yet cautious time. In March 2026, the Bank of England’s unanimous decision to maintain Bank Rate at 3.75% reflects concerns over inflation spiking due to the Middle East conflict. Energy prices have risen sharply, which could push CPI inflation toward 3% or higher in the coming quarters—well above the 2% target. This has driven 10-year gilt yields up to around 4.8%, making new bonds more attractive for income but pressuring existing bond prices.

David Wilson: For everyday investors, what does this mean for government bonds versus corporate bonds?

Michael Goldman: Gilts remain a safe haven, especially shorter-duration ones that are less sensitive to rate moves. However, with yields higher, they offer better income potential than in recent years. Corporate bonds can provide extra yield, but credit spreads have widened slightly amid economic uncertainty and slower UK growth forecasts of about 1.1% for 2026. Investors should focus on high-quality issuers in defensive sectors.

David Wilson: Any practical advice for those building or adjusting a fixed income portfolio right now?

Michael Goldman: Diversification is key. Consider laddering bonds across different maturities to manage interest rate risk. In the current environment, blending UK gilts with selective corporate bonds and perhaps some inflation-linked options can help. At Kingston Funds, we stress regular reviews—especially with global factors like AI infrastructure spending supporting growth elsewhere while the UK faces domestic pressures.

David Wilson: How does this tie into broader retirement or income planning?

Michael Goldman: Fixed income plays a vital role in providing stability. For retirees or those nearing that stage, higher yields today can support sustainable withdrawal rates. But volatility from geopolitics means staying flexible and not overcommitting to long-duration bonds if inflation risks persist.

David Wilson: Excellent insights, Michael. Readers can contact Welford Capital for personalised fixed income guidance tailored to these conditions.