The erosion of purchasing power is weighing heavy on clients' minds. With liquid assets earning next to nothing, clients are demanding investment solutions that counteract the insidious spectre of inflation.
The Office for National Statistics’ (ONS) plan to create a new inflation measure has been met with scepticism by asset allocators.
Consumer price inflation was unchanged over November, according to official figures, although it remains above target and could rise again in the coming months.
The incoming Bank of England governor has suggested scrapping inflation targeting when attempting to stimulate an ailing economy.
Inflation is likely to erode gilt and cash returns for some time yet so Andrew Bell urges investors to change their investment approach to avoid the impending decline in their purchasing power.
According to Neil Williams, the relevant UK authorities will not entertain the prospect of deflation so the questions become where will inflation come from and how should investors then react.
UK inflation showed a surprise jump in October as university tuition fees, food and transport pushed up prices by more than economists expected.
The UK’s inflation has fallen closer to the official target, although economists warn that it may soon resume its upward trend.
Ian Kernohan is "reasonably happy" with his outlook for inflation but there are so many caveats – the scale of QE among them – he sees opportunities in inflation-linked debt.
Latest ONS data shows the Consumer Prices Index fell back slightly to 2.5% in August, but the fact remains that inflation has stuck above the Bank of England's 2% target for almost three years now.
With long-term break-even inflation rates below 2.5% for the developed markets, Chris Iggo makes the case for having inflation protection in his bond portfolios.
Next week Japan will mark the first anniversary of the passing of 16,000 lives, with many more lives ruined and a mammoth undertaking ahead still to rebuild its east coast.
