Fears over gilts being trapped in a doom loop are overblown amid undue bearishness over the UK fixed income market, according to Nick Hayes, Head of Active Fixed Income Allocation and Total Return at AXA Investment Managers (AXA IM). “There remains this sense that gilts are incredibly challenged and stuck in a doom loop with 30-year bond yields moving higher and causing UK borrowing costs to rise,” he says. While long gilt yields have since fallen back, Hayes says the fact they remain elevated should not particularly concern investors. “Credit spreads are outperforming people’s very low expectations and they’re getting tighter and tighter – they are slightly defying gravity,” he says. “Credit spreads have got tighter but that doesn’t mean they’re about to go a lot wider.