Cavendish's Mumford: Central banks have dug themselves a hole

Rising interest rates a big risk

Paul Mumford, manager of the £55m TM Cavendish AIM fund, has said a rapid rise in interest rates is the biggest risk to markets while blaming "irresponsible" quantitative easing as the main cause of the current environment.

Speaking to Investment Week, the veteran fund manager said central banks had "dug themselves a whole" with vast amounts of QE, leaving investors nowhere to hide if interest rates rose. At its latest FOMC meeting, the Federal Reserve hinted it could begin normalising its $4.5trn balance sheet later this year, while the European Central Bank is still continuing its €60bn a month bond buying programme, which totals over €2trn. "The biggest risk is if interest rates went up rapidly and you had a liquidity crisis because of the overspending and irresponsible QE we have seen," he said. "...