ME and Japan turmoil are temporary diversions from inflation problem

ON BONDS

Insight Investment's April LaRusse believes inflation remains the biggest threat for investors.

Will they or won't they? Raise rates, that is. The Bank of England is in the uncomfortable position of seeing the economy struggle to recover from recession while inflation is way above its target. With interest rates having been held at 0.5% for 18 months now, the Monetary Policy Committee is split: at the last vote, three members wanted to raise rates, five wanted no change, and one member wanted to increase quantitative easing. So where does that leave interest rates, and the fortunes of the gilt market? Since the middle of last year, gilt markets have been increasingly pricing ...