A wave of speculative bets on company share price falls could sweep through the London stock market if recent rises in inflation push up borrowing costs, according to a veteran short-seller. But Cawkwell, who writes frequently under his nom de plume Evil Knievil, remains one of a shrinking band of incorrigible market gossips willing to pit their wits against large investment institutions and hedge funds that now dominate the London stock market. The latest signs of rising inflation, Cawkwell argues, could soon trigger a different mood among investors. Some companies, he suggests, will be rapidly found out as short-sellers move in to target shares that are overvalued. “We are having a rip-roaring rise in inflation.”As a result, Cawkwell predicts, many weaker companies are likely to be squeezed between tougher trading conditions and rising borrowing costs.

Source: The Guardian October 16, 2016 18:43 UTC