Inflation worries? How predictable

COMMENT

Inflation has become a predictable worry of investors in 2011. Last year many tried to ignore the gathering price problems in India and China.

Some still agonised over whether we could enter a new deflationary phase. Price rises seemed under control in the US and the EU, while wages were far from lively even in more inflation-prone UK. Despite this, last year the UK government removed inflation-linked Savings Certificates from sale, while index-linked gilts offered little positive yield. Some concerned investors put index-linked bonds or gold or equity-based investments into their portfolios as possible hedges against inflation. This January in the UK many are worried by the pace of price rises. Food and clothing, fuel and f...