BoE blurs guidance points to 2015 rate rise
A change in forward guidance blurs policy measures in the Inflation Report released by the Bank of England today.
A change in forward guidance blurs policy measures in the Inflation Report released by the Bank of England today.
Some emerging markets have found themselves wobbling in recent weeks‚ following a long period of hitching themselves to the loose monetary policy of the Federal Reserve. They face the choice of hanging on (by raising rates) or letting go (allowing their currency to depreciate) but neither of these options will be pain-free.
UK base rates are being tipped to rise next year but with an election due in 2015 will the government put pressure on the Bank of England to raise rates early?
Inflation has hit the Bank of Englands target figure of 2% for the first time since 2009 as figures from the Office of National Statistics show the consumer prices index rose by 2% over the year to December.
In recent weeks, we have spent time discussing the still-fragile nature of the US economic recovery, but we have not focused as much on another important factor that affects the markets – inflation.
The results of the European Central Bank monetary policy meeting are likely to include action to address fears of deflation – the question is what form that will take.
Kames Capital has changed the mandate for its inflation-linked fund to benchmark against the UK Retail Price Index +4% over the medium term.
Despite high unemployment rates, excess capacity and a sanguine inflation outlook from the major central banks, it is important to keep an eye on any potential inflation surprises that may be coming down the line.
Later this week the UK will release inflation data for April with the market consensus forecast that CPI dropped to 2.6% from 2.8% from March and that the RPI fell slightly to 3.1% from 3.3%.
The threat of high inflation has been a talking point for several months now, perhaps years, but how can you actually protect your portfolio from potential price rises?
Pimco has launched its GIS Inflation Strategy Fund for European investors which will invest in a range of real assets while hedging against the impact of market shocks.
James Montier's latest white paper looks at the causes of hyperinflation and argues that it is not just central banks printing money that will bring it about.