Economists and bond fund managers expect a downturn in UK inflation over the next two years despite today's announcement that it is more than double the Bank of England's target of 2%. The rise has affected the value of fixed income investments by UK institutions, which have shifted a significant proportion of funds into the asset class over the last year.

The Bank of England announced today that UK inflation, as measured by the Consumer Price Index, has hit 4.4%, up from 3.8% last month.