Britain triggers global inflation alarm
By Richard Milne and Tanya Powley in London, Dan McCrum in New York and Robert Cookson in Hong Kong
Some of the world’s leading investors have turned bearish on government bonds from developed countries as they warn of the growing danger of inflation.
Data this week showing the UK’s consumer price index hit 3.7 per cent in December fuelled that concern and sent benchmark British borrowing costs to an eight-month high of 3.72 per cent.
In Europe, inflation has risen above the European Central Bank’s target for the first time in more than two years, leading investors to bet on interest rates rises in the eurozone and UK this year.