Contrarian Investor: The return of inflation

The return of inflation

UK CPI inflation is set to turn negative for the first time ever next week, but, amid a bond market sell-off, David Stevenson says some signs point to inflation making a dramatic comeback.

The big investment narrative of the moment is that we are stuck in a deflationary rut. Everywhere we look, central bankers are throwing caution to the wind to make sure we don't slip into a Japanese-style timewarp. Sitting on the sidelines are caustic commentators such as Société Générale’s Albert Edwards, darkly muttering “we told you so”. But what happens if inflation is actually about to make a miraculous comeback? Pippa Malmgren, founder of DRPM consulting, has been sounding the alarm for quite some time about the impending inflation crisis. One of her core arguments is the common...