Talking Point  

Advisers split on impact of rate increases on investors

Advisers split on impact of rate increases on investors

A narrow majority of advisers voted that interest rates rising in the UK will not be harmful for investors, according to the latest FTAdviser poll.

The poll was conducted via Twitter and showed that 28 per cent of respondents view higher rates as good for investors, while 24 per cent voted that higher rates will make no difference. This comes to 52 per cent over all. 

In contrast, 48 per cent of those who responded took the view that a rate rise would be harmful. 

Many market participants had expected the Bank of England to put rates up from the current record low level of 0.1 per cent at its November meeting. However, the Monetary Policy Committee voted not to do so by a majority of seven to two.

Recent employment and inflation data has come in ahead of expectations, prompting further speculation among market participants that the UK base rate will soon rise, possibly at the next meeting in December. 

The latest inflation data point came in at 4.2 per cent, which is more than double the BoE’s mandated target of 2 per cent. The employment data showed little negative impact from the end of the furlough scheme.