However, Jane warns after a period of such low interest rates, and high borrowing, could lead to a rise in corporate defaults, which could ultimately lead to a “credit-driven recession”.
For this reason he is avoiding high-risk borrowers in fixed income and has a negligible exposure to leveraged businesses within equity, which should provide a cushion should this scenario play out.
He said: “A further mitigation is that central banks must be very conscious of this risk and therefore unlikely to pursue policies that lead to it, but they may have no choice should inflation really take hold.”
