{"id":19687,"date":"2019-10-17T11:34:29","date_gmt":"2019-10-17T11:34:29","guid":{"rendered":"https:\/\/smh.group\/?p=19687"},"modified":"2023-02-15T13:45:10","modified_gmt":"2023-02-15T13:45:10","slug":"interest-rates-back-on-the-slopes","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/interest-rates-back-on-the-slopes\/","title":{"rendered":"Interest rates back on the slopes"},"content":{"rendered":"\n

In September the US and European central banks cut\ninterest rates, again.<\/strong><\/p>\n\n\n\n

When the US central\nbank, the Federal Reserve, cut its main interest rate by 0.25% at the end of\nJuly, it was the first reduction in over 10 years. Less than two months later, the\nFed announced a second cut by another 0.25%. <\/p>\n\n\n\n

The Fed\u2019s move\nfollowed on from a rate change at the European Central Bank (ECB). Here, the\nmain rate was left unchanged (at 0.0%), but the negative<\/em> rate applied to\ndeposits made by commercial banks was moved from -0.4% to -0.5%. A bank leaving\n\u20ac1m with the ECB for a year will have to pay <\/em>\u20ac5,000 for the privilege. <\/p>\n\n\n\n

The Bank of England\nkept its interest rate unchanged at 0.75% in September, not least because, like\nthe rest of the UK, it is waiting to see what happens on the Brexit front.\nInvestors in government bonds appear to be expecting further rate cuts as the\nreturn available on gilts maturing in six months to 12 years\u2019 time is less than\nthe current base rate. <\/p>\n\n\n\n

The central banks\nare worried about a slowing global economy and the risk of a recession. They\nare less concerned about their nations\u2019 savers. This stance was highlighted in\na headline in Bild<\/em>, Germany\u2019s best -selling newspaper, which took aim at\nMario Draghi, the head of the ECB: \u201c’Count Draghila is sucking our accounts dry’.\n<\/p>\n\n\n\n

Depositors in the\nUK are not yet facing negative interest rates, although there are plenty of\nbank and building accounts (including ISAs) closed to new business which pay\nnext to nothing (e.g. 0.1% for the Halifax Bonus Gold account). At the time of\nwriting, the best rate available for instant access was 1.61% from a sharia\naccount, compared with the latest published CPI inflation rate (for August) of\n1.7%. <\/p>\n\n\n\n

There are still income yields of 4% and more available \u2013 for example the average UK share dividend yield at the time of writing was 4.23%. However, the higher income comes with greater risk to capital, making independent investment advice essential. There has been evidence enough just this year, in the problems at London Capital and Finance, that chasing the highest yields without advice can be a dangerous strategy. <\/p>\n\n\n\n

If you would like to discuss your personal investment strategy<\/a><\/span><\/strong> with one of our Chartered Financial Planners<\/a><\/span><\/strong> contact us on 0114 266 4432 or info@smhca.co.uk<\/a><\/span><\/strong><\/p>\n\n\n\n

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

In September the US and European central banks cut interest rates, again.<\/p>\n","protected":false},"author":4,"featured_media":16718,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[16],"tags":[238,387,239,97,386,349],"class_list":["post-19687","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-services","tag-bank-of-england","tag-income-yields","tag-interest-rates","tag-investments","tag-personal-investment-strategy","tag-us-federal-reserve"],"acf":[],"yoast_head":"\nInterest rates back on the slopes - SMH Group<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Interest rates back on the slopes - 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