Less than two in five (39 per cent) UK retail investors have faith in the Bank of England’s decision making, research has revealed.
The research, commissioned by HYCM, surveyed 964 UK-based investors who had investments in excess of £10,000, excluding the value of their savings, pensions and residential property.
It found that less than half (42 per cent) of those surveyed think the central banks is right to continue its rate hiking cycle to combat inflation.
When asked about the Bank of England’s hiking cycle, over a third (35 per cent) said rising rates have had a negative impact on the value of their investments.
Meanwhile, 46 per cent believe further rate hikes will damage the UK’s economic growth.
Despite this, only 42 per cent of investors say they monitor the Bank of England’s monetary policy decisions to inform their investment activities.
An additional 34 per cent stated they have shifted their investments towards asset or markets that are less sensitive to interest rate hikes over the past 12 months.
HYCM chief market analyst, Giles Coghlan, saidd: “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, Coghlan added that, 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.
“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,” he added.
“That said, with the research showing that fears about growth are creeping into investor’s minds, GBP weakness could be on its way now that the Bank of England has paused its hiking cycle.”
tom.dunstan@ft.com
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