At the end of September, the Fund ranked in the second quartile of its peer group over the last three months, outperforming its sector average. Despite growing concerns about the health of the UK economy, the Bank of England's Base Rate was left unchanged at 5.0 per cent for a fi fth consecutive month in September.Consumer price infl ation rose to 4.7 per cent in August, however, given the growth slowdown underway and recent sharp falls in the prices of oil and some other commodities, the notion that infl ation may return to the Bank of England's 2.0 per cent target sooner than had been expected gained credence over the month. Revised data released at the end of September showed that UK economic growth fell to zero in the second quarter compared with the previous three month period.A reduction in interest rates before the end of the year now appears likely. The Fund is invested primarily in a combination of certifi cates of deposit and commercial paper of short duration. A proportion of the portfolio is invested in corporate bonds (these being principally fl oating rate notes that pay variable interest rates linked to rates in the wholesale money markets) also of short duration.
