Swip eyes gilt reductions on inflation concerns

Swip's Graeme Caughey says the group could look to reduce gilt holdings over the next year on inflation concerns.

Caughey - who manages the eight retail funds across Lloyds' Scottish Widows, Swip and Clerical Medical brands - told Bloomberg it is "not clear inflation is well-contained at present". The manager says the Bank of England will probably keep its benchmark rate at a record low of 0.5% "beyond this year", before increasing it to between 4% and 4.5% by the middle of 2012. "At one point, the benchmark rate will have to rise. The bank will need to keep a very close watch on inflation expectations," Caughey added. "Our views on gilts and the economy have not changed as a result of the...