Inflation hits 4%: Industry reaction

The latest inflation figures, showing CPI reached 4% in January, has sparked speculation on higher interest rates and the impact on the UK economy.

Patrick Armstrong, managing partner at Distinction Asset Management,  believes inflation is a major threat to portfolios: "We expect inflation will remain more stubbornly persistent than the consensus opinion and expect it will continue to exceed the Bank of England expectations. "The doves will focus on low wage growth, spare capacity and high levels of unemployment suppressing inflation in the coming year. We expect inflationary pressures coming from emerging markets and the effects of zero interest polices, quantitative easing, the printing of money and rapidly rising energy and food ...