Jupiter Asset Management chief investment officer John Chatfeild-Roberts has warned inflation could near double digits over the next five years and be the “achilles heel” of the UK economy.
The UK consumer prices index fell to 2.5 per cent per cent in August, down 0.1 per cent compared to July.
However, Chatfeild-Roberts warns the current quantitive-easing programme, which stands at around £375bn, is storing up future inflation problems.
He says: “(Over a five-year timeframe) you can imagine inflation being towards the double digits. It may be that my five year time horizon is not long enough, but I see it to be the inevitable outcome.”
He adds: “Inflation is the potential achilles heel of the UK economy. We are seeing a shift in balance to emerging markets. If you look over the next hundred years, the sterling and dollar will lose a lot of purchasing power.”
Investment Quorum chief investment officer Pete Lowman says: “If the central banks keep printing money to get us out of lull period, the UK could get into hyper-inflation in the next three or four years.”
Jonathan Davis Wealth Management managing director Jonathan Davis agrees with Chatfeild-Robert’s forecast. He says: “There will be higher costs of living for everyone.”