Cazenove's Dean: Inflation bigger risk than double dip

Holding UK interest rates at crisis levels is "inappropriate" as rising inflation becomes a bigger concern than a double dip recession, says Julie Dean at Cazenove.

The manager of the £69m UK Dynamic and £62.3m UK Opportunities funds says if interest rates are raised from 0.5% to stave off inflation, there may be a growth dip, but at least there is the opportunity to later cut interest rates. "It is about the retention of monetary policy flexibility. If rates are not raised, your risk is inflation continues higher for longer, because there is nothing in there to check it. Expect that, at some point, inflation starts to have an impact on the real economy, because it slows down activity." Inflation reached 4% in January, twice the Bank of England's...