LONDON, June 13 (Reuters) - Franklin Templeton’s head of European fixed income David Zahn said on Thursday he had bought safe-haven UK government bonds as the chance of a no-deal Brexit rises.
“We feel the chances of a no-deal Brexit are increasing,” he said.
“This is in combination with the European economy not doing well and the chances of a Fed rate cut rising,” he added referring to the U.S. Federal Reserve.
He said he had previously held a short position in British gilts .
Zahn also said he had added “significantly” to positions in 30-year German government bonds because the European economy had not recovered as quickly as anticipated.
While a rate cut from the European Central Bank was unlikely, Zahn said he expected a return to quantitative easing in 2020. (Reporting by Virginia Furness and Dhara Ranasinghe Editing by Tommy Wilkes)