BlackRock, one of the world's largest pension and money managers, offers a gentle warning in what it describes as "this blurring of monetary and fiscal policy" as very low interest rates and big government spending take off, not just in the UK, but around the world.
"While there is little likelihood of material near-term inflation, once we look out further into this decade, this blurring of monetary and fiscal policy could bring about upside inflation risks globally," said Vivek Paul, Chief Investment Strategist for the UK, BlackRock Investment Institute, the research wing of the firm.
He says investors might consider looking at inflation-linked government bonds rather than the vanilla variety.
By Kevin Peachey
Personal finance reporter
By Szu Ping Chan
Business reporter, BBC News
- Copyright: PA Media
The UK's inflation rate fell to 1.5% in March, largely driven by falls in the price of clothing and fuel ahead of the coronavirus lockdown.
The Consumer Prices Index (CPI) fell from 1.7% in February,according to the Office for National Statistics (ONS).
Clothing stores had offered more discounts as shoppers began staying at home, it said. Falling oil prices also resulted in cheaper petrol.
Economists have said inflation could slide to 0.5% in 2020 as the economy shrinks.
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