The bond yields in your second figure are obviously not adjusted for inflation (ie, they are nominal yields, not real yields after inflation). So I’m not sure one can draw much of a conclusion from it.
That’s true, I should have used a chart with real interest rates (I chose that specific graph because it was the one that made the problem salient for me when I had first seen it).
However, with real interest rates it looks similar:
That’s not a chart of “real rates”, that’s the spread between a 10y rate and a spot inflation estimate. Real rates is (ideally) the rate paid on an inflation linked bond, or at least the k-year rate minus the k-year forecast inflation. The BoE have historic data here going back to ’85 and the rally is several hundred basis points less than your chart implies.
That’s true, I should have used a chart with real interest rates (I chose that specific graph because it was the one that made the problem salient for me when I had first seen it).
However, with real interest rates it looks similar:
That’s not a chart of “real rates”, that’s the spread between a 10y rate and a spot inflation estimate. Real rates is (ideally) the rate paid on an inflation linked bond, or at least the k-year rate minus the k-year forecast inflation. The BoE have historic data here going back to ’85 and the rally is several hundred basis points less than your chart implies.