- According to a survey of 964 Uk-based retail investors only 39% trust the Bank of England’s decision-making
- Less than half (42%) think the central bank is right to continue hiking the base rate
- 46% think higher wages are a major factor in fuelling high inflation in the UK
AS interest rates hikes impact on the economy and their investments, less than two in five UK retail investors have faith in the Bank of England’s (BoE) decision making, new research commissioned by HYCM has revealed.
The FX and CFD trading provider commissioned an independent survey of 964 UK-based investors, all of whom have investments in excess of £10,000, excluding the value of their savings, pensions and residential property.
It found that less than two in five (39%) trust the BoE’s decision making, and less than half (42%) think the central bank is right to continue its rate hiking cycle to combat inflation.
In July, UK wages outstripped the rate of inflation for the first time in more than 18 months. According to 46% of investors, high wages are a major factor in fuelling high inflation in the UK.
When quizzed about the BoE’s hiking cycle, over a third (35%) say rising rates have had a negative impact on the value of their investments. Meanwhile, 46% believe further rate hikes will damage the UK’s economic growth.
Despite this, only 42% of investors say they monitor the BoE’s monetary policy decisions to inform their investment activities, and 34% have shifted their investments towards assets or markets that are less sensitive to interest rate hikes over the past 12 months.
Giles Coghlan, Chief Market Analyst consulting for HYCM, said: “It’s clear that the Bank of England’s rate hiking cycle has had a significant impact on investor sentiment towards the central bank. However, despite some losing faith in the bank’s decision making, many investors still recognise that more action may be needed to curb the inflationary pressures that remain, such as the recent wage growth data.
“For much of this year, there has been a general consensus among economists for the need for further rate hikes to curb inflation, which is why the GBP has enjoyed month-on-month growth in 2023. That said, with the research showing that fears about growth are creeping into investors’ minds, GBP weakness could be on its way now that the Bank of England has paused its hiking cycle.”
