MORE than half of Assetz Capital’s peer-to-peer investors are not convinced that more frequent Bank of England interest rate rises are on the way.
Bank of England Governor Mark Carney (pictured) said in May that interest rate rises could be “more frequent” than expected if the economy performs as forecast.
But a poll of 34,400 investors by P2P lender Assetz Capital found 54 per cent do not believe this will be the case over the next two years.
However, 41 per cent were confident in the central bank’s prediction, while four per cent said they were very confident about the likelihood of more rate hikes.
Fresh data released on Wednesday showed that inflation slowed to the Bank of England’s target of two per cent in May, raising speculation that interest rates could soon rise.
“It’s unsurprising that our investors are sceptical about the Bank of England’s pledge given the present lack of a solid base for that claim,” Stuart Law, chief executive of Assetz Capital, said.
“The Bank made similar noises last year before making a u-turn after inflation dropped in January, and the economic consequences of whatever form of Brexit we eventually see or don’t see are yet to be felt this year.
“We’ve also seen the temporary economic boost from Brexit related stockpiling and that now needs to unwind and is likely to suppress growth for a period.”
Law warned that even if the Bank of England does increase interest rates, it is unlikely to help bank and building society savers.
“Base rate rises are seldom fully passed on,” he added.
“Unlike borrowing costs to borrowers where base rates are nearly always passed on.”