Less than two in five UK retail investors have faith in the Bank of England’s (BoE) decision making, research commissioned by HYCM has revealed.
Just 39% of UK retail investors trust the Bank of England’s decisions, while less than half (42%) think the central bank was right to continue hiking the base rate.
While energy costs have fuelled inflation, nearly half (46%) of investors reckon higher wages are a major factor.
The Bank finally stopped hiking the base rate this month, ending a run of 14 straight rate hikes.
Giles Coghlan, chief market analyst consulting for stock broker HYCM, said: “It’s clear that the Bank of England’s rate hiking cycle has had a significant impact on investor sentiment towards the central bank.
“However, despite some losing faith in the bank’s decision making, many investors still recognise that more action may be needed to curb the inflationary pressures that remain, such as the recent wage growth data.
“For much of this year, there has been a general consensus among economists for the need for further rate hikes to curb inflation, which is why the GBP has enjoyed month-on-month growth in 2023.
“That said, with the research showing that fears about growth are creeping into investors’ minds, GBP weakness could be on its way now that the Bank of England has paused its hiking cycle.”
Over a third (35%) of investors say rising rates have had a negative impact on the value of their investments.
Meanwhile, 46% believe further rate hikes will damage the UK’s economic growth going forward.