Edinburgh's £1 billion fund manager Bruce Stout has castigated central bankers for their belated response to rising inflation as "woefully inadequate" in the face of rapidly deteriorating economic conditions in the first half of this year.

Writing in his review of the first half performance by abrdn's Murray International Trust, Mr Stout said growth, inflation, corporate profits and living standards all crumbled appreciably amid an "increasingly grudging realisation that there are no easy solutions to issues such as wage inflation, war in Ukraine, wanton interest rate policy, recession risks and the cost of living crisis".

“Continuing lockdowns, supply chain disruptions and widespread shortages combined with upward pressure on wages created a seismic shift in global inflationary dynamics," he said.

"Central banks belatedly began to aggressively raise interest rates, their delusional expectations for just 'temporary' then 'transitory' inflation exposed as woefully inadequate for the negative emerging environment."

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Against this backdrop the £1.77bn trust – which invests in global equities with the aim of achieving above-average dividend payments – recorded a net asset value (NAV) total return of 3.8 per cent during the six months to the end of June. That compared to a 10.5% decline on its reference index, the FTSE All World TR.

The share price total return during the period 9.5%, reflecting a narrowing of the discount at which the shares trade relative to the fund's net asset value. Two interim dividends of 12p each have been declared, payable on August 16 and November 18.

Mr Stout added: "For the first time in well over a decade, certainly as regards financial markets, such prevailing pessimism manifested itself in selling into strength rather than buying into weakness.

"Against such a backdrop, capital destruction was likely to be ubiquitous, and so it proved.”