Inflationary pressures spur pension funds to seek hedges
Inflation is one of the top risks facing pension funds, but how can they deal with the risk while still maintaining adequate returns?
On October 6, the Bank of England agreed to inject £75 billion into the UK economy in order to stimulate growth. This is in addition to the £200 billion it has pumped in since 2009. While the first round of quantitative easing did help to boost growth, it also contributed to a higher inflation rate. Inflation in the UK now stands at 5.2%, more than double the target of 2%. The fear is that having more money sloshing around the economy could push the rate even higher. For UK pension schemes
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