IFA Magazine covered the recent interest rate decision, gathering quotes from a range of industry professionals. Below is an extract from the coverage, follow this link to read the full article.
Gonçalo de Vasconcelos, CEO and co-founder of SyndicateRoom:
In today’s economic environment where interest rates are at record lows, there is a greater need than ever for UK investors to seek alternative routes to returns on their investments. Britain is a nation of savers and investors and for individual investors, today’s decision may be seen as another blow to expectations for household financial planning. It makes it even clearer that alternative investments offer the opportunity for long-term financial gains.
James de Sausmarez, Head of Investment Trusts at Henderson Global Investors:
Human beings are naturally risk adverse. It’s a cognitive bias that is hard to overcome when we consider our savings. This flaw in our thinking compels us to cling to the nominal cash value of our savings, so in recoiling from taking investment risks, we unwittingly suffer the corrosive effect of inflation. Our research shows you can be near certain you will lose money over the longer term by putting your savings in cash accounts, as the cost of living, and expectations for living standards will quickly climb out of reach of the paltry returns on cash deposits. It’s costing us billions of pounds every year.
Neil Brown, European equities investment manager at ATI:
Central banks around the world and particularly perhaps the US Federal reserve will be keeping a close eye on the Bank of England today. A degree of rate cut has already been baked-in by the markets given weak PMI data over the last few weeks and is what is needed. However, the run the FTSE 100 has enjoyed post-Brexit means the market response is likely to be muted. As further stimulus raises questions around ‘what next’, small cuts of this 0.25% variety are marginally positive and unlikely to spook investors.
European markets will continue to remain focused on political risk, both at the national election level and on the future shape of the European Union, as well as on the not unrelated issue of how to resolve Italy’s banking problems within the existing rules.