Woodford predicts interest rate rise by end of 2007

The head of UK equities at Invesco Perpetual, who runs the company’s £7.5bn High Income fund, believes the scope for the Monetary Policy Committee (MPC) to cut interest rates was limited meaning they could shoot up in 2007. “In the medium term inflation will prove to be more stubborn than the market believes and as a result I see interest rates continuing to rise in the near term,” he said. Woodford said the MPC would have been uncomfortable with the recent UK inflation numbers, which were high as a result of increasing food prices. “Food prices have turned from being consistently...