View more on these topics

Pay is the way to halting inflation

PSigma income manager Bill Mott believes UK inflation problems are likely to be temporary if wage rises are kept under control.

Mott considers that the majority of domestic inflation concerns are docile, with the problem coming from spiralling oil and food prices.

He says inflation is likely to reach its peak in the latter half of this year, with the only concern being that oil and food prices will take another upward spike.

He says: “Another upward spiral is unlikely. I think that inflation peaks are nearing and the only concern is that these rising prices seep into wage concerns and lead to wage inflation. It is important that there are tight wage restraints to offset that possibility.”

Bank of England governor Mervyn King and Chancellor Alistair Darling have called on companies to show restraint on wage increases in the face of higher inflation.

Mott says global inflation concerns rest in the hands of emerging markets. He says: “I think they can control that growth and also impose wage restraints.”

Hargreaves Lansdown head of research Mark Dampier says: “This is what we are all hoping for but all bets are off if Gordon Brown gives in to the public sector and renegotiates 6 to 7 per cent wage rises.”

Premier Asset Management senior investment manager, global equities Mike Jennings says: “I am sceptical these problems will not reach people’s wages. Emerging markets are a greater concern, as food is 33 per cent of the consumer price index there. Food is a far bigger issue for them if prices continue to rise. The same can be said for energy in the likes of China where tariffs have been in place.”

Recommended

Means-test fear over pension ban

Government plans to ban firms from encouraging or forcing staff to opt out of personal accounts could compromise well-intentioned employers concerned over meantesting.Hamish Wilson actuarial and pensions consultancy partner John Branford says it would be “scandalous” if employers were penalised for alerting staff to the fact they may lose out on means-tested benefits.Branford says: “We […]

Inflationary woes

It seems investors should be readying themselves for a “backs against the wall job” after Bank of England governor Mervyn King wrote his second letter in just over a year to Chancellor Alistair Darling.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com