Bringing you live news and features since 2006 

Two-thirds of investors fear negative interest rates

RELATED TOPICS​

UK investors fear the prospect of negative interest rates and are unsure of their consequences, new research commissioned by HYCM has found.

More than 900 UK-based investors, all of whom have investments in excess of GBP10,000, excluding the value of their residential property and workplace pensions, were surveyed on behalf of the trading broker.
 
According to the research, 64 per cent of investors said they are concerned by the prospect of negative interest rates being introduced by the Bank of England in 2021. What’s more, over half (55 per cent) are none the wiser when it comes to understanding how negative interest rates would affect their financial portfolios. 
 
The Bank of England’s Monetary Policy Committee (MPC) is next due to meet on Thursday 4 February. While negative interest rates are not likely to be announced, recent comments from members of the MPC suggest negative interest rates could be introduced in 2021 to help boost economic growth.
 
When it comes to investor confidence, 50 per cent of investors are optimistic that the financial markets will fully recover this year from the disruption caused by Covid-19. Over half (54 per cent) said they are making short-term financial decisions due to market uncertainty caused by the pandemic.
 
Giles Coghlan, Chief Currency Analyst at HYCM, says: “More clarity is needed as to whether the Bank of England will need to use negative interest rates, especially now there has been a positive Brexit deal for the UK at the start of 2021. 
 
“For now, we know that Governor Andrew Bailey wants negative interest rates to remain part of the Bank’s ‘tool kit’. Whether they will be deployed is another matter.
 
“Should investors be worried? My short answer is no. Yes, negative rates could affect rates linked to mortgages, credit cards and personal loans. However, retail investors should not expect to pay interest on the cash they are holding in bank savings accounts as this has not happened in Switzerland which currently have negative interest rates of -0.75 per cent.’ 
 
“I’m more interested to see how the pound and FTSE could react to such an announcement and whether this might lead to new investment opportunities. Certainly, a walking back from the use of negative interest rates creates opportunities for short term GBP strength at the very least.” 

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

ETFs
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by