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This week on The Art of Investing, Rich, Mark and Chris are joined by Kieron Lynch, a gilt market veteran whose career began during Britain’s 1976 financial crisis and spans 50 years across the UK bond market.
With oil above $100, bond yields climbing and central banks facing increasingly difficult decisions on interest rates, Kieron looks back to the inflation crisis of the 1970s to ask what investors and policymakers can learn from history.
The team explore why credibility matters so much to bond markets, whether the Bank of England is falling behind the curve and why treating inflation as “transitory” can be such a dangerous strategy. Kieron also explains what would need to happen before he becomes confident buying long-dated gilts again.
Plus, the team assesses another difficult week for the portfolio as rising oil prices, a stronger US dollar and changing expectations around AI investment put pressure on commodities and emerging markets.
This Week’s Highlights:
🕰️ What Can Investors Learn From the 1970s?
Kieron takes us back to Britain’s 1976 financial crisis, when soaring inflation, negative real yields and collapsing confidence ultimately forced the UK to seek help from the IMF.
📈 Why Inflation Comes in Waves
From the oil shocks of the 1970s to today’s disruption around the Strait of Hormuz, Kieron explains why defeating one inflationary shock doesn’t necessarily mean the problem is over.
🏦 Is the Bank of England Behind the Curve?
The team questions whether incremental rate rises will be enough, with Kieron arguing that markets need convincing evidence that policymakers are serious about bringing inflation under control.
💷 Are Gilts Finally Becoming Attractive?
With long gilt yields approaching 6%, Chris and Kieron debate whether current yields represent an opportunity – or whether investors should wait for stronger action from the Bank of England.
🤖 AI Hits a New Roadblock
Warnings from leading AI executives over safety and the pace of development hit global chip stocks, while raising questions about whether hyperscalers could begin slowing their enormous capital expenditure plans.
🛢️ Oil Puts Markets Under Pressure
Brent climbs to around $108 while US oil reaches $100, increasing inflationary pressure and contributing to a difficult week for commodities and other risk assets.
Portfolio Snapshot:
📊 Weekly portfolio performance: -1.2%
📅 2026 year-to-date return: +10.8%
Commodities were the biggest drag this week, with copper falling around 6% and BlackRock World Mining down around 5%. Emerging markets also came under pressure as semiconductor stocks fell, while the FTSE 100 was the portfolio’s strongest-performing risk asset.
Portfolio Changes:
No portfolio changes this week.
The team debate adding longer-dated gilts as yields approach potentially attractive levels, but ultimately decide to wait and see how the Bank of England and other major central banks respond. The portfolio therefore maintains its 15% cash position and 2.5% allocation to short-dated gilts.
Big Questions This Week:
- What can today’s investors learn from Britain’s inflation crisis in the 1970s?
- Is the Bank of England falling behind the curve?
- Why is credibility so important when central banks fight inflation?
- Are long-dated gilts finally becoming attractive at current yields?
- Could slowing AI investment reduce the competition for capital?
- Are resilient equity markets signalling strength or creating a false sense of security?
What You’ll Learn:
✔️ Why inflation can return in multiple waves
✔️ How monetary and fiscal policy worked together to restore UK market confidence
✔️ What investors mean when a central bank is “behind the curve”
✔️ Why bond markets react so strongly to central bank credibility
✔️ What could make long-dated UK gilts attractive again
✔️ Why treating inflation as permanent could actually help make it transitory
Disclaimer:
This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes.
Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.
What is The Art of Investing?
Looking to turn Market Chaos into Investing Clarity?
Welcome to The Art of Investing - a brand new podcast that transforms market noise into clear investing strategies. Brought to you by IG, global investing platform, FTSE 250 and over 50 years in the markets.
This isn't your typical finance show.
Whether you're taking your first steps into the investment world or you're a seasoned investor looking to sharpen your edge, you've found your new secret weapon.
Every Friday, join hosts Rich McDonald, Mark Holden & Chris Fellingham – three investing legends bringing you a combined century of market wisdom. They'll decode the week's biggest moves, reveal the hot topics that could make or break a portfolio, and share the insights that separate winners from wishful thinkers.
But here's where we blow every other podcast out of the water:
Introducing our live Model Portfolio. With IG's access to thousands of global markets, you'll watch our strategy unfold in real-time, unfiltered investment action, that you can follow.
Every week, we'll pull back the curtain on exactly how the portfolio is performing. The wins, the losses, the lessons learned – it's all here. This is investing education with skin in the game.
Are you ready to master the art of investing?
This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice, financial planning guidance, or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are for educational purposes only. Past performance is not an indication of future results. Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.