Ruffer trio: UK rate hike could be insufficient to keep inflation genie in the bottle

Keeping inflation-linked bonds as protection against rising inflation

The managers of the £385m Ruffer Investment Company have committed to holding onto index-linked gilts as portfolio protection, despite recent price falls, as they fear interest rate hikes will fail to curb the rise of inflation in the UK.

The managers of the Ruffer trust, Hamish Baillie (pictured), Steve Russell and Duncan MacInnes, said they are holding index-linked bonds for protection against the inevitable rise in inflation, despite recent "noise" from the Bank of England temporarily hitting fixed income assets. The trio believe any attempts by the Bank to raise interest rates to combat inflation will be 'behind the curve' and will fail to stop real interest rates from falling lower. They said: "There are risks that a reversal of the emergency 0.25% cut, and a possible further rise next year, could prove insufficie...