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Although inflation is likely to cast its shadow over economies and markets for some time to come, UK equity investors can not only protect themselves from higher prices, but also seek to profit from them, Mr Karunathilake said..

“Some companies have revenues linked to inflation. For instance, the regulatory regime for utilities ensures that revenue growth is tied to inflation. National Grid, a top-10 holding in the fund, is a good example.”

Mr Karunathilake said companies with the power to pass on prices to consumers were also attractive. For instance, he said increased prices from farmers could be passed on to consumers by the big British supermarkets such as Tesco, another of the fund’s top-10 holdings.

Another inflation play, according to Mr Karunathilake, is the resource sector, since higher commodity prices are largely responsible for inflation across the board.

“Whether it is fuel or food, supply is unable to cope with surging demand from developing countries. Although the price of oil has fallen from its recent peaks, it is still 60 per cent higher than this time last year. Royal Dutch Shell is my largest holding.”

Trevor Green, manager of the £406.3m New Star Managed Distribution fund, said both the utilities and tobacco sectors were fairly insensitive to price increases. But he added that finding stocks to weather the inflation storm meant drilling down further than sector plays.

“CIBA, the Swiss-based chemicals company, has issued a profits warning because it cannot pass on price increases for raw materials. In contrast, Croda Chemicals, a FTSE 250 stock, provides a small but key part of its customers’ end-product, so can get price increases through.”

Mr Green said another key stock picking issue was whether companies had hedged against inflation in their cost base.