Investors can switch to higher-risk bonds, including corporate bonds, and high-yield bonds, which tend to be more economically sensitive.

Osman says such bonds are likely to offer protection against higher interest rates, but also be more volatile. 

The challenge with investing in these types of bonds is that if government bond yields are rising then the relative attractiveness of the higher-yielding bonds diminishes, as the spread between the higher and lower-yield bond narrows.

Forest says that in the present economic climate, it may be appropriate to be quite defensive in terms of corporate bond exposure in the UK, because the BoE has announced that as part of its withdrawal of QE that it will initially stop buying any more corporate bonds, and then will begin selling bonds, with the aim of selling £20bn worth by 2023. 

He says a situation similar to that in government bonds, where supply begins to exceed demand, will happen, and so corporate bond prices will begin to fall.  

david.thorpe@ft.com