Investors in the North East view rising inflation and low interest rates as more of a threat to their wealth than Brexit, according to a new survey of over 1,000 UK savers and 500 High Net Worth Individuals commissioned by Rathbone Investment Management.
50% of investors surveyed saw consistently low interest rates as a major threat and 35% considered the prospect of rising inflation as a key concern. By comparison, just 10% saw Brexit as one of the biggest obstacles to building and maintaining wealth.
Numerous economic bodies have predicted recently that Brexit will have a negative effect on the UK economy and consumer finances, but the survey shows that so far the majority of investors feel well prepared for the UK’s upcoming exit from the EU.
Indeed, only 10% of investors in the North East region surveyed claimed to consider Brexit as a substantial threat to their finances. This suggests that most of these investors in the region are confident that they have taken or can take the necessary steps to mitigate any future economic uncertainty.
By contrast, the spectre of mounting inflation has raised concern for many investors – particularly those who hold a substantial amount of their wealth in cash. The rate of inflation has increased substantially over recent months, rising to 3.0% in December 2017, just under its highest point in five years. Of those surveyed, a third (30%) said they had already been negatively affected by the rising rate of inflation and 5% were concerned that it would impact them in the near future. Conversely, just over a third (35%) believed their finances hadn’t been effected at all by the rise in inflation.
Additionally, half (50%) of the investors surveyed said they felt more positive about their finances than the previous year, with only one in ten (10%) feeling less confident than a year ago.
Nick Swales, Regional Director of Rathbones’ Newcastle office comments: “Brexit has dominated the political and economic agenda for the last year, and with negotiations starting to heat up, that’s unlikely to change any time soon. But in this climate of heightened uncertainty, it’s encouraging to see investors in the North East appreciate that there need not be a ‘bad’ Brexit scenario as far as their investments are concerned.
“So long as investors are vigilant and prepared to adapt and make sure their investment portfolio is diversified, they should be able to make positive investment choices which mitigate both the risks of Brexit and inflation. Speaking to an adviser will help ensure that investment choices are made with all eventualities taken into account.
“The fact that half of the investors in the North East that we surveyed felt more positive about their financial situation than last year is encouraging and shows, despite some adverse conditions, shrewd investment strategies have the potential to reap rewards.”