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Tempting as it was to buy some more pharmaceutical shares based on the quantity of pills thrust down my throat while in hospital, I took the opportunity to take a more measured look at what was going on in the wider world. The stockmarket has proved remarkably resilient, given the continuing flow of indifferent news from North Africa, Japan and the Middle East.

And there has been little to set the champagne corks popping closer to home, with Irish debt back in the news and Portugal careering towards a bailout. Even the economic runes are hard to read, despite a modest upward revision of GDP growth. But one story is refusing to go away – the resurgence of inflation as a factor in our lives.

The rising cost of living is an obvious consequence of growing wealth and aspirations in the Third World. One outcome of the rise of China is that imported deflation has evaporated.

Inflation remained so low for so long as manufacturing was steadily moving to China, driving down the cost of goods and removing pricing power from business. This process is now largely complete. Meanwhile, the Chinese themselves are better off and more demanding in what they earn and consume. This is most likely to be felt in agricultural products.

We have been warned of a population explosion towards the middle of this century that will demand an increase in the output of foodstuffs of around 70 per cent. The problems are compounded by a wealthier world seeking a richer diet.

There will be upward pressure on commodity prices elsewhere. Oil seems unlikely ever to return to the levels enjoyed less than a decade ago. But food? There is little real discretion in its consumption from our point of view.

Efficiencies that have driven food prices down may be more difficult to achieve on the same scale in the future. Investment in and focus on agriculture looks to be a continuing feature for some time.

Last month, I interviewed Barings’ Jonathan Blake, head of global resources and manager of the global agriculture fund. I expect managers to talk their own book but his enthusiasm for what has been viewed until now as a relatively pedestrian asset class knew few bounds.

And it is not just in agriculture that inflation will demand a rethink of investment strategy. Bonds, which enjoyed a resurgence in the flight to safety accompanying recent events, are vulnerable to rising living costs.

The passing of the old tax year is a good time to review investment strategy anyway. One of my abiding concerns is why investors wait until the end of the tax year before subscribing to an Isa. If they are worth doing at all, surely they are worth doing early.

Perhaps investors should be looking at how portfolios should be rejigged for a higher inflation world and put the new investments in an Isa.

Brian Tora is an associate with investment managers, JM Finn & Co

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