Feb. 13th 2013
Inflation in the U.K. will remain above target for the next two years, Bank of England Governor Mervyn King warned on Wednesday, but tightening monetary policy was not the solution as it could push the economy deeper into recession. There are growing fears among some investors that central banks in the developed world aren’t acting to stem rising inflation. They fear it may be too late to tighten monetary policy. Others fear a repeat of 1994, when bond yields surged and bonds sold off after the Federal Reserve raised rates over the spring and summer of that year.