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Stopford on effects of populism on investors

 

Rising inflation is a "real possibility" if the growth of populism forces central bankers to pursue "unconventional" policies, John Stopford has said.

The co-head of multi-asset at Investec Asset Management UK said: "Populism has been on the march. We have seen it in the UK with Brexit, we have seen it in France and we have seen it in the US and so on and if things are like that when times are relatively good, the concern for me is what is it going to be like when things are bad because the central banks and policymakers have less ammunition to fight an economic slowdown.

"Clearly we have economies saddled with fairly high debt levels, government and corporate debt, so inflation is a solution, one way those debt levels could be addressed.

"Growth would be ideal but that seems difficult so perhaps we will go down even more unconventional policy routes.

"Inflation in those circumstances might be a real possibility."

Mr Stopford added that markets were sending investors "conflicting" messages about the future direction of the global economy.

He cited the inversion of the yield curve in the US combined with the "pretty strong" rally seen in equity markets.

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damian.fantato@ft.com