The current European economic climate calls for caution, according to Roger Guy and Guillaume Rambourg, managers of the Gartmore European Selected Opportunities fund.
On the upturn in inflation, they explained that Eurozone inflation rose to record levels in June and shows no signs of abating. "We believe this will be one of the biggest headwinds facing European companies over the following months," said Rambourg. He added: "In our opinion, inflation risks remain to the upside, in spite of the ECB's recent interest rate hike. Commodity prices remain strong, but even more worrisome for European company margins, are the wage growth induced inflationary pressures." The pair is also concerned about the risk of stagflation. They deemed the combination ...
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