Give credit where credit is due

PIMCO's Ketish Pothalingam and Luke Spajic, discuss why the sterling credit market offers more opportunity than the euro and dollar markets.

The UK's economic recovery is marred by rising inflation, which has been running in excess of the 2% target for the past two years. But much of the headline inflation is due to the VAT increase and external factors driving up commodity prices rather than internal factors such as an increase in wage rates. Nevertheless, the Bank of England (BoE) has an obligation to manage inflation and may therefore be forced to act by the end of the year. If inflation spirals out of control or the UK government's austerity measures run out of steam, we could see a decline in the currency and a furthe...