Bruce Stout is to retire as lead investment manager of the Murray International Trust in June 2024.

And, as the trust announced its report for the six months to June 30, the fund management veteran launched a stinging attack on the deployment of interest rate hikes by central banks to combat surging inflation.

Mr Stout will have served as lead investment manager of the Edinburgh-based trust for 20 years when he steps down next year.

The trust, which is run by managers at investment giant abdrn, confirmed Martin Connaghan and Samantha Fitzpatrick, who have worked with Mr Stout since 2001 when they joined what was then Aberdeen Asset Management from Murray Johnstone, as his successors.

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Commenting on the outlook, Mr Stout, Mr Connaghan, and Ms Fitzpatrick, said: “Cracking a nut with a sledgehammer seldom delivers the desired results. The shell usually breaks but the kernel invariably gets pulverised in the process.

“Faced with stubbornly high inflation in the developed world, discredited and detached central banks continue to follow a similar Pavlovian practice which, in their world, involves hiking interest rates until demand subsides. This is theoretically logical if it is assumed that excessive consumer demand is the root of all price inflation.

“However, it is woefully misguided if rigidity of labour markets, deglobalisation, rising global protectionism or “doing whatever it takes” through printing money are structurally influencing the overall cost of living. Against such a backdrop, religiously following such a one-dimensional dogma appears at best foolhardy, at worst downright destructive.”

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The retirement of Mr Stout was announced as Murray International Trust, which invests in global equities to achieve above-average dividend yield, with long-term growth in dividends and capital ahead of inflation, posted a net asset value total return of 2.2% in the half year to June 30. Although the trust does not have a benchmark, its performance compared with a net asset value total return of 7.9% by the reference FTSE ALL World TR Index.

Chairman David Hardie, who will retire from the board on December 31 when he will be succeeded by Virginia Holmes, said: “During this review period, there was little respite from the inflationary concerns and interest rate hikes that have dominated the financial backdrop for over 18 months now.

“Despite energy and commodity prices significantly declining from this time last year, most consumer-driven economies in the developed world continue to be squeezed by higher food prices, rising mortgage rates, and dwindling disposable incomes.

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“With the impact of higher bond yields translating into higher debt servicing costs, genuine fears over future asset quality are beginning to emerge, with all areas of bank lending attracting scrutiny.

"For financial markets, the divergence between the performance of bonds and equities proved extremely pronounced: the former constantly fretting over wage inflation and the erosion of real incomes; and the latter apparently ignoring the reality of rising recession risks and downward revisions to growth and corporate profitability. For individual investors and savers, the holy grail remains capital appreciation and real returns; the quandary- where to find them.”

The trust declared two interim dividends of 2.4p in respect of the six months to June 30, in line with last year.