Wednesday, April 13, 2011
Inflation Genie in or out of the bottle?
Artemis fixed income manager James Foster says the governor of the Bank of England needs to raise rates now to prevent inflation becoming embedded in the system. Foster, who runs the Â£516m Artemis Strategic Bond fund, says the MPC needs to act now by raising rates before people begin to clamour for higher wages, leading to an inflationary spiral. He says: "Mervyn King is starting to lose the plot. He is not being as aggressive as he should be on interest rates."He needs to get them back up again or inflation will become embedded in the system and will be much harder to get rid of."