Inflation

Inflation will stay "stubbornly high" this year, pressuring the Bank of England to up interest rates from the second quarter, according to the Confederation of British Industry.

Inflation-linked gilts are "very attractive" as a defensive allocation in portfolios, despite low real yields, says Chris Iggo at AXA Investment Managers.

Raising interest rates too fast this year in an attempt to stem inflation would be the ‘ultimate policy error', says Caspar Rock, CIO at Architas.

BILL MOTT ON INFLATION

The UK and US are 'lying' about rising inflation, while most other governments around the world acknowledge this is happening, says Jim Rogers.

The first quarter of this year should see strong growth following the shock 0.5% UK GDP fall in the fourth quarter of 2010, says Rupert Watson, asset allocation strategist at Skandia Investment Group.

Inflows into emerging markets could see a short-term pause as investors consider the impact of inflation in China and other macro issues, says Schroders' CIO Alan Brown.

Further quantitative easing, low short-term interest rates and rising inflation will be key themes for the year ahead, says Patrick Armstrong at Distinction Asset Management.

China faces significant problems as inflation and property prices look set to form a bubble, says Hugh Young at Aberdeen Asset Management.

Developing economies will drive the global upturn, despite fears of a hard landing in China and other emerging markets last year, says Michael Hasenstab at Franklin Templeton.