Managers brace for trade war causing stagflation

Mr Woodford said a change of priority from policy makers in China and higher interest rates in the US will push global inflation downwards.

Edward Park, investment director at Brooks MacDonald, has bought some more UK equities on the basis that if a period of market strife will soon be upon us, then the best option is to be invested in the cheapest market, which is the UK.

David Scott, an adviser at the firm of Andrews Gwynne in Leeds, said he has placed many of his clients into 40 per cent cash, because he said asset prices have been inflated by low interest rates, with the result that when interest rates rise, equity and bond prices will fall.