Rice: 2011 will see 'unintended consequences' of extreme policy

The next 12 months will be marked by unintended consequences of the "extreme policy" implemented in 2010, which may include rising bond yields and inflation, says Cazenove's Chris Rice.

The firm's head of European equities says if 2010 was the year extreme policy worked, 2011 will be a year in which the unintended consequences of that policy manifest. He says: "The two obvious unintended consequences of extreme policy we can expect to dominate over the coming year are rising bond yields in the West and rising inflation in the East." Yet individual Western nations are experiencing rising bond yields for ostensibly different reasons, Rice says. "At least we know why Spanish and Irish yields are rising - the more traditional increase in premia is a result of the fear of...