Andy Green, Chief Investment Officer at Hymans Robertson responds to the Bank of England’s interest rate announcement in November:

“Given the last decade of increasingly lower interest rates, today’s Bank of England announcement will be extremely welcome news for savers and may bring slightly more pressure for borrowers. However, it is important to remember that base rates had been unchanged since 2009 and were only cut by 25bps last year as a measure to fend off risk of recession resulting from Brexit vote. This is simply a reversal of that measure. Rates will continue to stand at very, very low levels.”

Commenting on the potential impact for pension funds, Andy continues:

“This move by the Bank of England today, may not be the silver lining for pension funds that some predict, as nominal gilt yields and the real yield on index-linked gilts are little changed from their levels at the beginning of the year. Many of the longer term issues facing the UK such as Brexit and a sluggish housing market look set to remain well into 2018 and this move has already been well-flagged in the market. In this ongoing environment of low yields and uncertainty we continue to recommend a focus on assets that can deliver predictable returns with attractive levels of income to deal with pension fund outflows.”