Deflation

In the second of a special Big Question, fund managers discuss their fixed income exposure in light of inflationary fears.

In the immediate aftermath of the last recession and accompanying financial crisis, there was every reason to expect companies to be reticent about embarking on long-term, productivity-enhancing investment programmes.

It remains difficult to interpret pre-and post-Brexit trends but much of the latest data points to a resilient economy, with high employment and signs the housing market and consumer spending have weathered the initial storms.

Risk of global recession

Renewed yen weakness could bring about a fresh global currency war resulting in a 'tidal wave of deflation' in China and the West, Société Générale's Albert Edwards has warned.

The Office for National Statistics this morning revealed UK CPI inflation turned negative for the first time on record, but key industry figures suggest this deflationary spell will be temporary.

Central banks may resort to 'helicopter drop' measures to stave off the threat of deflation, according to Investec's Alastair Mundy.

Abenomics in Japan has been a roaring success, and should not be seen as just a quick fix 'sugar high' for markets, according to Neptune's CEO Robin Geffen and chief economist James Dowey.

The Bank of England's Monetary Policy Committee has warned ongoing sterling strength could prompt a prolonged period of lower inflation expectations.

Ardevora co-founder and partner Jeremy Lang addresses five of the biggest concerns facing UK equity investors in current markets.