Fidelity tips inflation to peak below 5% after holding steady in May

Andy Weir, the manager of Fidelity's Global Inflation Linked Bond fund, has said he expects inflation to peak below 5% later this year, after the official reading for May showed price rises had halted.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation held steady at 4.5% last month, with rising food and drink prices offset by a decline in travel fares. The wider RPI reading was also unchanged at 5.2%, and Weir said he expected CPI inflation to remain under 5%, despite a warning from the governor of the Bank of England, Mervyn King, that it could jump above this level. He said: “We are forecasting that CPI and RPI will remain high, with CPI peaking at below 5% in September. “Food prices rose again massively, and there are a number of core compone...