How to hedge against inflation
Global markets recently faced a correction, inflation remains above the 2% target and interest rates are likely to rise, but how can investors prepare?
Global markets recently faced a correction, inflation remains above the 2% target and interest rates are likely to rise, but how can investors prepare?
Ten-year treasury yields have soared after US consumer price inflation (CPI) surpassed expectations by 0.5% in January.
January consumer price index (CPI) data and recent comments from Bank of England governor Mark Carney himself seem to suggest that an interest rate rise next month is inevitable. But it would be overhasty to assume that the dovish central bank will suddenly turn hawkish.
Having hit 3.1% in November, the Consumer Prices Index (CPI) 12-month rate fell to 3% in December, prompting suggestions UK inflation may have peaked.
UK Inflation hit a five-year high of 3% in September, making the prospect of Bank of England (BoE) raising interest rates next month even more likely.
UK Inflation hit 2.9% in August, far surpassing the Bank of England’s 2% target, but minus inflationary pressures, investors fear an oncoming deflationary nightmare.
Pressure on the Bank of England to raise interest rates was handed another blow on Wednesday unemployment fell and UK earnings growth, while beating expectations, failed to outpace inflation.
Hot on the heels of the US, the UK has reported weaker than expected inflation data and like its opposite number on the other side of the pond, the Bank of England is now faced with a quandary over rate rises.
Consumer price inflation was unchanged in August but economists warned we have yet to witness the full impact of sterling depreciation post-Brexit vote.
The UK slipped in to deflation in September, the Office for National Statistics said on Tuesday. But, while the number came in slightly lower than many economists had predicted, but many are more focused on how it is likely to change going forward.
Consumer price inflation rose slightly in July from 0% to 0.1% in July the Office of National Statistics said on Tuesday.
China’s GDP growth may be slowing, says Barings’ Hyung Jin Lee, but consumption-orientated in-roads are wide open for investors.