To predict the future, look at base rates and product launches
Looking backwards in order to look forwards might sound an odd thing to suggest, but often the key to the future is still in an old door. Products and interest rates are perhaps the best indicators of what is afoot on the global stage. At present, UK interest rates remain very low in comparison to years gone by, and the likelihood is they will remain at or near 5% for some time to come. Trend spotters will have noticed that a hockey stick has gotten hold of the UK base rate and is presently on a slight upward curve. However, despite forward rates that today show a 30bp-35bp premium over five years, it would be a very brave man that invested for five years at or near 5.05%. In a two-week period in February, with 4.75% holding firm, forward rates dropped down to a few points over base for five years, then suddenly lurched forward to 30 or more.
Products also offer a glimpse into what is expected and, as a friend of mine once said, there is nothing new under the sun. With that in mind, there continue to be myriad versions of equity-based bonds of all shapes and sizes and supposedly offer that holy grail of no risk and wonderful return. Of course the reality is often not quite the picture painted, and wisdom is essential when shopping around. Commodity-based deposit bonds are likely to become the new black and already are seeing increased recognition as a possible way to bear the rate curve. We will see an increasing array spread before us as we progress through 2005 and it is an area to watch as they do have an underlying strength and so represent an opportunity today. But as in all these decisions, the trick is like being a good card player - stick at what meets your overall goal.
Spring in 2005 brings with it an election in the UK and the latest Budget reflects that. Around Europe, expectations are increasing that the EU central bank will also raise its base rate, despite protestations from some of the founder members. The Chinese economy has soared recently and is set to become the new major economic power, being a net creditor nation, whereas the US in comparison is a net debtor nation.
Established on the Isle of Man since 1989, Bradford & Bingley International is a provider of deposit-based products to the expatriate, international and Manx communities. The company has grown substantially over the past 15 years and serves thousands of customers in more than 125 countries worldwide. With assets under management of over £2bn and share capital and reserves in excess of £207m, they are today one of the largest deposit takers located offshore.
Bradford & Bingley International has a reputation for providing service of the very highest quality reflected in its 98% customer satisfaction level, and further benefits from the trusted and respected high street brand name of its parent, Bradford & Bingley plc. Bradford & Bingley International enjoys a legal undertaking provided by their parent, that while remaining their subsidiary, they will discharge any liabilities Bradford & Bingley International are unable to meet themselves. Bradford & Bingley plc has assets in excess of £23bn. In addition to the financial backing of their parent, the company also offers the comfort of a statutory depositor protection in the form of the Isle of Man Depositors Compensation Scheme.
The company's core philosophy is to provide consistent and competitive returns to customers through their sterling, euro and US dollar-denominated deposit accounts. This multi-currency product portfolio starts from £10,000/ $10,000/B10,000 and incorporates instant access and notice accounts (both with monthly interest options), tracker accounts linking to the Bank of England base rate, fixed rate bonds and bespoke bonds which are tailored to an individuals requirements. In addition, the company also offers an excellent tax-planning product with its accumulation account where interest is only added on closure.
Bradford & Bingley International also provides US dollar and euro money market deposit facilities, meeting the growing needs of its international customer base. As well as money market facilities business accounts are also available in sterling, euro and US dollar denomination to fiduciaries, businesses, companies and other regulated organisations based within the British Isles (including the Channel Islands and Isle of Man. The Bradford & Bingley International team prides itself on delivering a personalised and friendly service, coupled with market leading interest rates for institutional investors, trusts and private individuals.
Joined as head of strategy, multi asset, in June
Group income protection
Nine in 10 do not have income protection
Set to become part of Single Financial Guidance Body