Monday, October 26, 2009
It’s all going to end in tears
Ruffer has become the latest group to move out of conventional gilts and into their inflation-linked counterparts, as Schroders' head of global fixed income compared the UK's money-printing policy to Zimbabwe's. Nick Gartside, who has recently shifted into index-linked gilts, pointed out both countries had used quantitative easing to assist government financing, which in Zimbabwe's case has resulted in hyperinflation. Although the UK has condemned Zimbabwe's version of quantitative easing and has planned strenuously to avoid its ruined finances, both Mr Gartside and Steve Russell, investment director at Ruffer, have said inflation is now a real threat to the UK economy.