Rathbones’ Ed Smith on the latest CPI figures

“While the Governor of the Bank of England gets off on a technicality this time – 3.0008% doesn’t count as breaching 3%! - we believe that peak inflation is close. Indeed, our analysis suggests domestically generated inflation may have peaked as early as the first quarter of this year. And if it weren’t for British Gas pushing up their prices and the recent increase in the sterling price of oil, headline consumer price inflation could have peaked earlier than November too. There may be concern about this especially with wage growth lagging, but investors and consumers need not worry too much. We believe that inflation will remain well anchored longer term. We also believe the Bank will be more concerned about supporting growth than what we see as a ‘high’ inflation blip, and today’s number will not alter the very shallow path of interest rates set out by the Bank at their last policy meeting.”

Ed Smith
Head of Asset Allocation Research

What matters in the long run

Over the longer term, the prices we pay for goods and services are influenced by many different forces. To determine how inflation might impact the real value of your wealth, the Rathbones research team has explored the three main forces we believe are likely to drive prices over the next 20 years — demographics, globalisation and employment trends. We have also explored the different investment and asset allocation strategies that could work best under different inflation environments.

See our inflation report for more
You can read about the economic themes driving inflation in greater detail in Rathbones’ latest investment report Under pressure?

For more information, please contact:

Madhu Kalia
Intermediary PR (UK/Europe)
Rathbone Unit Trust Management
020 7399 0256
07825 596302
madhu.kalia@rathbones.com

Sam Emery/Hugo Mortimer-Harvey
Quill PR
020 7466 5056/5054
sam@quillpr.com
hugo@quillpr.com