Investments in bonds and equities 'are strong despite rate rise'

Fri, 19 Jan 2007

The value of investments in bonds and equities has not suffered as a result of the recent rise in the base rate, it has been claimed.

On January 11th 2007, the monetary policy committee of the Bank of England surprised a number of financial services analysts by opting to raise the base rate to 5.25 per cent.

This marks the highest interest rate since the summer of 2001, which may be of concern to debtors with large mortgages or significant credit card deficits.

Quentin Fitzsimmons, head of government bonds at asset management group Threadneedle Investments, acknowledged that further interest rate rises could be a problem for some households but said that these difficulties are generally not reflected in the investments sector.

"Corporate profitability is robust and we believe that this should help equities shrug off any drag from higher interest rates," he explained.

"Meanwhile, UK bond markets are offering higher yields than seen for some time."

A bond is an investments tool that enables governments and companies to raise capital.

Under the savings scheme, the bondholder receives the money he originally invested at the end of an agreed term along with accumulated interest.

add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

 

 

Investments Newsletter

Investments Newsletter