Managers reveal inflation-busting tips as CPI soars

Investors have come under increased pressure to inflation-proof their portfolios as a fresh spike in CPI and RPI raised doubts levels will drop back to the Bank of England's 2% target in 2012.

CPI inflation rose at an annualised rate of 5.2% in September, the joint highest level seen since the series began in 1997, while RPI inflation increased to its highest level in 20 years at 5.6%. The BofE maintains inflation will pull back sharply in 2012, pointing to lower food and energy prices as well as this year’s VAT hike falling out of the annualised figures early next year. A deteriorating growth outlook makes it “more likely inflation would undershoot the 2% target in the medium term without further monetary stimulus”, the Bank said at its latest meeting, when it announced an...