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Carney warns fund groups to prepare for rate rise sell-off

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Bank of England governor Mark Carney has warned major fund management groups a rise interest rates could spark an investment sell-off among retail investors.

The Sunday Times reports Carney is concerned that homeowners will rush to liquidate holdings in stocks and bonds in order to cover higher mortgage repayments.

The Bank governor is reported to have asked 135 of Britain’s biggest fund managers how they plan to cope with investors wanting their money at short notice.

One senior fund manager told the newspaper: “The Bank wants to make sure we can support the daily prices we offer to investors. They have been asking for a lot of information about liquidity in recent months.

“Their fear is even small investors who have really large mortgages may have to sell their stock and bond portfolios so they can manage their debt.”

Carney has previously said an interest rate rise could happen at the “turn of the year”.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Borrowers with holdings in ‘stocks and bonds’? Are there really that many then?

  2. I think TBH when rates rise most UK borrowers will be worried about meeting household bills, not their ‘stocks and bonds’. If ever there was a comment which shows how out of touch some are…

  3. Everyone ready for the 30s+70s+worse over the next 10 years? Carney will be following the market higher as investors shun gilts (post the 16-17 recession). Sterling crisis, property market bubble bursting for good. FTSE at 1,000. It’s nice to be prepared for it.

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