2016! The year of interest rate rises?01 January 2016
2016 has arrived and a New Year is ahead of us. There are many financial changes coming up in the next few months, as we have detailed in previous blogs and our Client Newsletter. If you would like a copy, or extra copy, of this, then please let us know.
Just before Christmas, the Federal Reserve in America raised its base rate by 0.25% for the first time since 2006. This was a long anticipated move and many have suggested marks the end of a recessionary era, with so hugely positive news on the US economy that has pointed to making this prudent change. Indeed, many other global economies are also seeing positive economic headlines and it is anticipated that other central banks will follow this lead in 2016.
Global stock markets largely rose in the day before this anticipated increase. It was first expected in September 2015, but was eventually put back to December.
Will the Bank of England raise base rates in the UK in 2016? The indicators are that they will, but probably not in the next few months. Inflation is running at 0.1% in November and unemployment is falling, so there is no real immediate pressure. Any eventual rate rise is expected to be very gradual, as with future changes in America. Possibly good news for savers and possibly not for those with mortgages and loans. Chapters Financial does not offer advice on mortgages, but does refer clients to an independent mortgage broker if you need to review your loan arrangements. We always advocate a regular review of saving and investment arrangements. With the change in base rate in America noted, and the reduction in the Deposit Protection limit from £85,000 to £75,000 from 01 January 2016, now might be a very good time to achieve this.
No individual advice is provided during the course of this Blog. If you would like to review your savings and investment arrangements then please contact the team at either our Guildford or Woking offices.
We hope you have a great 2016!
Keith Churchouse FPFS
Chartered Financial Planner
Certified Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.