THIS time of year there is a surge of interest in gardening and people descend on the RHS’s Chelsea Flower Show.

If this was an investable asset, I'm sure the shares would rise fivefold.

Following in the footsteps of Cleve West and Robert Myers, this year’s Brewin Dolphin garden, awarded a Silver Gilt Medal, was designed by Matthew Childs and is even more remarkable as it is his first ever garden at Chelsea.

Matthew delivered a design that is calm, reflective and private with a simple geometric layout.

The design is inspired by the company’s ethos: bespoke and innovative, but firmly rooted in past traditions.

The Gilt Edged Medal comes at an interesting time within the fixed interest universe.

Government Treasury stock is no longer gilt edged yet national debt is still commonly described as a Gilt in the marketplace.

What is more, the traditional relationship between gilt yields and GDP has recently broken down whereby yields have stayed low, despite evidence of stronger economic growth.

Falling unemployment and stronger economic growth usually increase consumer confidence and investors’ appetite for risk, resulting in higher inflation and rising interest rates, thus leading to higher bond yields.

However, US gilt yields have fallen, and because US and UK bond yields are closely correlated, the fall in US yields has reduced UK Gilt yields – despite strength in the UK economy.

Slack in the economy, such that we are not operating at full capacity and current productivity is not inflationary, explains the lack of wage growth and low inflation.

Falling prices of industrial goods in the Eurozone also signals disinflation.

The combined effect of low overseas inflation plus the strong pound means the UK is importing falling prices too, helping to keep bond yields lower. US interest rates are expected to stay low with futures markets pricing in the Federal Reserve’s base rate to stay below two per cent until 2017 and this too is contributing to the low bond yields in the UK.

This said, fresh data delivered a slightly higher UK inflation number at +1.8 per cent, marginally above March’s +1.6 per cent.

The rise is unlikely to influence Governor Mark Carney at the Bank of England (BoE) on rates in the short term, such that the rise was mainly due to ‘base effects’ and still under the Bank’s two per cent target.

With Easter having just passed, transport costs typically rise over the holiday period and lower commodity prices and a stronger pound suggest that inflation is likely to remain subdued for some months. However, the BoE will be keeping a watchful eye on wages whereby more jobs and higher employment costs could fuel inflation.

Considering the inverse relationship between interest rates and bond yields and the market deviating from the norm, is your portfolio geared to return higher levels of income should interest rates rise?

Samantha Dolby is an investment manager at Brewin Dolphin and offers advice on a wide range of financial services to private clients, trusts, charities and pension funds. Past performance is not an indication of future performance. The information contained in this article has been taken from public sources and is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.