Investors don’t expect rate rise until 2015 or beyond

19 July 2013

  • Halifax Share Dealing surveys investors to establish what impacts their investment strategies and where they are investing

With confidence in the FTSE 100’s six month outlook at its highest level for over a year, over half (53%) of investors don’t expect the Bank of England base rate to rise until at least 2015 according to the latest Halifax Share Dealing Market Tracker.

Two year wait for increased rate
Though the new Governor of the Bank of England may have surprised some by saying investor speculation that interest rates would start rising from the end of 2014 was "not warranted", the majority of investors surveyed by Halifax are in agreement with this sentiment, with 15% expecting rates to remain at a historic low until 2016.
Almost a third (28%) are of the opinion that rates may rise in the next 12-18 months, however, leaving a small minority (6%) still anticipating a rate increase this year.

Damian Stansfield, Halifax Share Dealing, comments:
"With the economy still in the early stages of recovery, only a minority of investors are expecting interest rates to rise within the year. Since the new Governor assumed his role, and with July’s MPC meeting seeing members voting to retain current quantitative easing levels, any investors sitting on the fence are likely to have been given greater confidence that a rate rise will be later rather than sooner.

"The recent boost in the housing market has also supported an increase in general confidence in the economy. While other forces undoubtedly have a huge impact on company and sector performance, strong consumer confidence and a stable base rate provide investors with a sound starting point to consider the likely performance of their current portfolio and other potential investments.”

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