Inflationary pressures are posing a dilemma for investors and prompting an increase in demand for bonds that offer protection against rising prices, an investment expert has claimed.
Rising food and energy prices have initiated increases in inflation over the past six months.
Added to this, markets are pricing in further rises over the next few years.
Alan Wilde, head of fixed-income and currency at Baring Asset Management, explained to the Financial Times: "Inflation is likely to be a theme this year. Prices are going up everywhere and this could lead to some problems in the world economy and markets."
He added: "Inflationary pressures have prompted demand for index linked bonds as investors seek protection."
This comes after research conducted by Barclays Stockbrokers recently claimed that the majority of investors (53 per cent) have a bullish outlook for the FTSE in 2011.
The UK's largest online execution-only stockbroker found that investors are confident that the FTSE will rally over the next 12 months.
Inflation poses dilemma for investors
Inflation poses dilemma for investors
Mon, 10 Jan 2011
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