Some 43% of retail investors think the Bank of England should stop hiking interest rates to avoid a banking crisis, research commissioned by HYCM has revealed.
Over a third (35%) say interest rates have risen too high and are negatively impacting their investments.
Last week the Bank increased interest rates to 5%, while forecasters like Schroders expect them to increase to 6.5% in the coming months.
The Bank has been rapidly increasing interest rates in a bid to curb inflation.
Half (50%) of investors see inflation as the biggest risk to their portfolios, suggesting it’s something of a no-win situation.
Giles Coghlan, chief market analyst, consulting for HYCM, said: “While the effort to contain US inflation now seems to be bearing some fruit, UK inflation is proving to be stickier than expected. Following the Bank of England’s 12thconsecutive interest rate hike, persistent inflationary pressures, including wage growth and a tight labour market, mean that interest rates could rise even higher still this year.
“With core inflation ticking up and the headline print remaining stagnant, our research shows that investors are rightfully concerned about the impact of inflation on their assets and the wider economy.
“However, the Bank of England is no longer forecasting a recession for the UK and has revised GDP up for next year to 0.75% from a prior projected fall of -0.25%, which should provide investors with some confidence about the road ahead.
“That said, with millions of homeowners still to feel the full impact of rising interest rates, stronger growth may still prove illusive for the UK economy, especially if rates have to move to 5% and beyond to tackle strong UK inflationary pressures.”
The majority (56%) of investors believe that persistent inflation is now ingrained in the economy and will be difficult to reverse.
