Inflation

Ben Lord, co-manager of the M&G UK Inflation Linked Corporate Bond fund discusses this week's inflation figures and the impact of interest rate hikes.

A series of quarter-point interest rate hikes will begin in May, according to analysts examining Bank of England governor Mervyn King's latest obligatory letter to the Chancellor.

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

The UK inflation rate rose to 4% in January, which is double the government's target and up from 3.7% the previous month.

Official inflation figures due out today are misleading the public, according to international experts who say the data understates the true increase in the cost of living.

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Emerging markets are set to continue delivering higher growth and lower volatility than developed markets, with EM equities to return more than 10% per year until 2015, says Barclays Capital.

The pound has gained against the euro ahead of Wednesday's Bank of England inflation report, which is expected to show inflation has hit over 4%, increasing pressure on the Bank to cut rates.

Sebastian Lyon has warned volatility will increase on his £894m Trojan fund as higher inflation and falling wages impact the markets.

Fidelity is changing the investment parameters of its £182m Fidelity Global Inflation Linked Bond fund, allowing manager Andy Weir to reduce average duration.