Inflation pressures are set to stick, survey says
MORE THAN six out of 10 investors expect persistent inflation to still be hitting the UK in six to 12 months time, according to research seen by City A.M.
Only half of the surveyed fund managers expect interest rates to rise within three to six months, the study from Capital Spreads showed.
“With no action from the Bank, the ‘cheap money’ scenario looks to be continuing for a good while yet, and there are even fears that the Treasury will agree to further quantitative easing,” said Capital Spreads chief Simon Denham. “A story with this strapline has ‘stagflation’ written all over it.”
Despite this threat, investors are “cautiously optimistic” over UK economic prospects, while 84 per cent think the Bank of England will be forced to tighten policy in six to 12 months from now.