Hepworth: Western markets to fall 10% on policy action

Ecclesiastical's Robin Hepworth has warned Western equity markets could fall as much as 10% when central banks finally act to tackle inflation.

Hepworth, running the £110m Higher Income fund, says markets are at risk of a correction if interest rates are raised to combat soaring prices. “We see further scope of a 5%-10% fall in the market, particularly in domestic-focused stocks,” he says. Hepworth has been favouring equities over bonds given inflation is higher than average – particularly in the UK where CPI is running at 4.4%. Equities now account for 61% of his fund – but he is holding back from making further moves until some of the steam comes out of markets. “Over the last six months we have started putting money bac...