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Prospect of rate rise is receding

Bank rate was held at 0.5 per cent at last week’s monetary policy committee meeting for the 28th month in a row and quantitative easing has been kept at £200bn.
The last rate change was on March 5, 2009, when it was cut from 1 per cent to 0.5 per cent.

Newton Investment Management global strategist Peter Hensman says: “Despite the persistence of the overshoot of the inflation target, the minutes of the last meeting indicated that, at the margin, the committee had become more concerned about the downside risks to growth as uncertainties continue to swirl regarding the stability of the financial system in the face of the problems in the periphery of Europe and the domestic economy deals with fiscal austerity.”

John Charcol senior technical manager Ray Boulger says: “As the markets become increasingly worried about the growing intensity of the euro crisis, caused by fundamental flaws in its concept and hence impossible to solve on a permanent basis, the likelihood of the MPC increasing bank rate any time soon diminishes.

“The question now is not whether bank rate will increase this year but whether it will increase next year.”

Minutes from the June meeting of the MPC show new member Ben Broadbent deciding against following in his predecessor’s footsteps in calling for base rate to be increased. The MPC was 7-2 in favour of keeping rates at 0.5 per cent.


Big firms face rising costs over dearth of bundled DC

Big companies are facing soaring automatic enrolment pension costs as a bundled defined-contribution capacity crunch leaves a dearth of quality products. Bundled DC schemes offer services such as pension scheme management, admin, investment and member communications within a single product. Pensions consultant Hymans Robertson believes the bundled DC provider market will become more selective as […]


Aegon AM to rebrand as Kames Capital

Aegon Asset Management is to rebrand as Kames Capital. Aegon says the move, which will take place on September 1, 2011, is part of its plan to accelerate the growth of its third party business with the firm saying it is keen to differentiate its specialist investment management capabilities. The business will be headed up […]


FSA warns on VCT and EIS promotions

The FSA is cracking down on Venture Capital Trusts and Enterprise Investment Schemes that are being marketed primarily on the tax incentives offered and not highlighting the risks involved. In a financial promotions update, the regulator says the increase in tax relief and the wider reform of the VCT and EIS sector, is likely to […]

UK housebuilders remain a value trap – despite post-Brexit falls

By Mark Martin & Holly Cassell, Neptune UK Equities As investors continue to digest the UK electorate’s vote to leave the EU, Neptune’s Mark Martin and Holly Cassell explain why they believe housebuilders remain dangerously overvalued Click here to view full article Important information  Investment risks  Neptune funds may have a high historic volatility rating and […]


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