View more on these topics

‘Rate rise does not go far enough’

F&C growth and income manager Ted Scott has hit out at the Bank of England’s monetary policy committee for raising the base rate by just 0.25 per cent.

Scott says although rates are now at 5.5 per cent, the highest level since 2001, the committee could have gone further to tackle inflationary demands, meaning another rise is almost a certainty. He says many people will be expecting another 0.25 per cent rise after this month’s hike but a 0.5 per cent rise would have been a more effective response to inflationary pressures.

Bank of England governor Mervyn King had to write a letter to the Chancellor explaining how inflation reached 3.1 per cent, one point over the target 2 per cent, a first for the MPC in 10 years.

Scott says the base rate rise will have the greatest effect on general retail stocks but will not have a wider impact. He says: “An increase of 50 basis points would have shown consumers that Mervyn King and the MPC mean business and are serious about nipping the problem of inflation in the bud. Instead, with recent rises in the price of oil combined with relatively high consumer spending and a resilient housing market, neither of which are likely to be greatly affected by the 0.25 per cent rise, inflationary expectations are likely to continue to dog the economy,”

New Star chief economist Simon Ward says: “A bank rate of 5.5 per cent is modest by historical standards but represents a heavy burden on consumers carrying record debt. Interest payments will soon absorb nearly 10 per cent of household income – a higher proportion than in 1998 when official rates reached 7.5 per cent.”


The rate composers

Five-page special report opens with Mike Kipling, deputy chairman of The Actuarial Profession’s life board, explaining the computations that go into setting annuity rates and how they work to protect the pensioner throughout retirement.

Advisers still angry over ABI calls for regulatory action over commission

Advisers say the ABI’s call for regulatory intervention to move them to factory-gate pricing is missing the point and there are bigger issues that need to be addressed in the industry.Alpha to Omega chief executive Stewart Wooles says the call comes as no surprise considering what is at stake.He says: “One could be excused for […]


Lord Sheikh

The chairman and chief executive of Camberford Law has juggled a successful career at the Lloyd’s broker with an active role in the House of Lords since becoming the Conservative Party’s first Muslim peer. He sees his role as protecting and promoting the financial services industry. Interview by Paul McMillan.

Sesame, You’ve (finally) got a Friend

At last the wait is over. Friends Provident this week came to the rescue of Sesame, the IFA network with a burgeoning direct arm and comparatively strong multi-tie proposition that now has a single, dedicated provider parent.

Neptune video: Indian valuations and Modi’s pro-investment agenda

Kunal Desai, Head of Indian Equities, discusses his expectations for the Indian market and highlights the key indicators that he is watching for 2015.

In the video, Kunal addresses:

• Indian equity valuations and the importance of stock selection in gaining exposure to the earnings upgrade cycle

• The BJP’s strengthening ambition in its pro-reform, pro-investment agenda


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm