M&G's Woolnough plays down inflation fears

M&G's Richard Woolnough believes both the long and short term outlooks for inflation are similar - namely they will not be a significant issue.

Addressing the Fidelity FundsNetwork Investment Forum, the M&G Corporate Bond manager claims the combination of reasonably high levels of unemployment in the UK and US combined with broadly excess capacity in both economies means we are unlikely to see much inflation. Woolnough says investors are currently ‘getting paid to take duration risk' and points to the fact that the yield curve is at its steepest in 15 years. This is, he says, a global phenomenon rather than being specific to one bond market. Woolnough adds he 'wants to take credit risk'. He bought BAA bonds, but avoided Br...