You are here: Home - Investing - Experienced Investor - News -

Carney may be forced to raise interest rates in 2017, says top UK fund manager

Written by:
The Bank of England could be forced to raise interest rates next year despite the likelihood of the British economy deteriorating, according to one of the UK’s leading fund managers.
Carney may be forced to raise interest rates in 2017, says top UK fund manager

Veteran investor Richard Buxton, who is head of UK equities at Old Mutual Global Investors and whose career spans more than 30 years, said Bank governor Mark Carney will have to act if the Federal Reserve (the Fed) increases US interest rates.

A decision on US rates will take place later this month and markets now forecast a 100% probability they will be increased, 12 months on from the first hike in December last year.

“The Fed will raise rates soon and Carney is facing 180 degrees in the wrong direction,” he said.

“Carney won’t want the interest rate differential between the US and UK to be too great otherwise it will put more pressure on sterling.

“He may have to raise rates as the economy deteriorates.”

Buxton (pictured) criticised Carney for cutting rates in the aftermath of the Brexit vote.

“The Bank of England was panic stricken. It was a huge mistake cutting rates from 0.5%. It wasn’t going to get people borrowing.”

He admitted if Carney did raise rates next year, it wouldn’t be by much.

“It won’t be enough to cause a housing market collapse,” he said.

The manager also hit out at peer-to-peer lending, calling it the “next mis-selling scandal”.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week