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Richard Buxton: ‘Carney might be forced to raise rates in 2017’

Buxton Richard Old Mutual

Old Mutual Global Investors chief executive Richard Buxton says the Bank of England might be forced to raise interest rates next year despite the UK economy “gradually decelerating”.

Speaking at an event in London yesterday, Buxton said with the US likely to increase rates this month BoE governor Mark Carney may have to act as well and hike rates in the UK.

Following recent remarks on the outlook for the UK  where he suggested a slower growth path for 2017, Buxton reiterated the UK is not going to face a recession next year. But he believes it will be a more difficult year for stock pickers like OMGI.

Buxton says:“The [Federal Reserve] will raise rates soon and Carney is facing 180 degrees in the wrong direction.

“Carney won’t want the interest rate differential between the US and UK to be too great otherwise it will put more pressure on sterling. He may have to raise rates as the economy deteriorates.”

Buxton added the Bank reaction to the Brexit vote has been “a mistake” and counterproductive since the interest rate cut was triggered by a too pessimistic economic outlook following the referendum vote.

Separately, the OMGI chief commented on the recent report from the FCA which found active management is failing to provide value for money for investors.

Buxton says the FCA is “promoting passives” saying there was “always scope” to hamper the fund management industry through “unintended consequences of regulations”.

He says: “Fee pressure is not something I worry about.The regulator has a very price-conscious mindset and they highlight that many advisers tend not to promote passives.”

Buxton claims there is “less pressure on fees than you might think” as many clients either invest in passives with low fees, or they do not mind paying higher fees for funds with high conviction.



Richard Buxton: ‘I don’t hold much hope in UK growth’

Old Mutual Global Investors UK equity fund manager Richard Buxton says he doesn’t hold much hope for UK growth. Speaking at a conference hosted by AJ Bell today, Buxton said: “We are in a difficult place in the UK at the moment.” He added that current conditions were the “most unfavourable markets I have ever seen”. […]

Buxton Richard Old Mutual

Richard Buxton: QE is the wrong policy for today

It appears Prime Minister Theresa May has decided to put an industrial strategy at the centre of her “Government for everyone, not just the privileged few”. While it has been confirmed this is not about the Government “picking winners”, I  am curious as to what exactly this strategy will be. It may be that once […]


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Japan 2017 Outlook: Abenomics 2.0

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