Member Article

Inflation rise anticipated

With a weaker currency and Government policy seeking to repay the deficit over a longer period, LEBC Group is expecting inflation to rise. Immediately after the EU Referendum result LEBC increased exposure to index linked investments in its model portfolios in anticipation of this.

Individuals can protect themselves against this by: renewing maturing index linked National Savings Investments; buying additional state pension via extra National Insurance contributions; seeking investment in shares of companies which can pass on price rises to their customers.

Kay Ingram, director at LEBC said: “All of these options require funds to be tied up and investment in shares involves taking the risk that values may fall in the short term as well as rise. They can only be considered for funds not needed for shorter term or essential spending.

“Short term cash requirement need to be met first to avoid having to cash longer term savings during a down turn. With interest rates having been cut cash is unlikely in the short term to keep pace with inflation. The amount of cash on deposit needs to be reassessed from time to time to avoid erosion of savings by inflation.”

This was posted in Bdaily's Members' News section by LEBC Group Ltd .