Where to invest in an inflationary environment

Despite UK inflation dropping for a second consecutive month in June to 3.2%, this does not necessarily signal the start of a longer-term trend

If we look back to the immediate aftermath of the global financial crisis, one topic that polarised market opinion was the inflation/deflation debate. For the deflation proponents, the UK’s slide into recession was just the first step on the path to generalised and sustained declines in both prices and wages. Despite the best stimulative efforts of policy makers, the combination of ongoing de-leveraging, credit overhang, significant spare capacity and the collapse in consumer demand, meant the UK was potentially facing economic depression. Conversely, those arguing the inflationary ca...