Threadneedle: EM inflation to rise further in Q2

Inflation in the emerging markets will rise further over the next three months followed by further tightening measures, while the US has seen a rapid rise in growth expectations, says Jeremy Podger at Threadneedle.

The firm's head of global equities says inflation in the emerging economies is surprising on the upside, leading investors to question the consensus overweight in emerging market assets. In contrast, the US economy is seeing a sharp upgrading of growth expectations, largely due to the second round of quantitative easing and further fiscal stimulus through the extension of tax cuts. These factors boosted growth in the fourth quarter of last year, stemming fears of a double-dip recession. Podger says there is even growing confidence that the sovereign debt situation in Europe is ‘under ...