Negative rates set to cause significant market distortions - CFA UK

Heightened risk on the horizon

David Brenchley
clock • 3 min read

Investors need to be aware of heightened liquidity risk, leverage and credit risk as an extended period of negative interest rates threatens to force many to chase returns, CFA UK has warned.

The economic downturn caused by Covid-19 "could trigger an historically unprecedented shift to negative rates in the UK", CFA UK claimed, with the Bank of England actively considering lowering Bank Rate even further than its current 0.1% level. Elsewhere around the world, the assumption that negative and ultra-low interest rates would be transitory seem likely to be proven incorrect. Should this environment prevail for several years, this "could have a deeper, broader and longer-lasting impact than before, due to the Covid-19 pandemic", CFA UK said. CFA UK chief executive Will Goodhar...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Chris Justham: Join the investment rebellion

Chris Justham: Join the investment rebellion

Let's start with a game of 'Are you as rational as you think you are?'

Chris Justham
clock 17 September 2025 • 3 min read
Muted response as Labour names Grimsby Town FC co-owner next investment minister

Muted response as Labour names Grimsby Town FC co-owner next investment minister

After the sudden exit of Poppy Gustafsson last week

Eve Maddock-Jones
clock 08 September 2025 • 2 min read
Hargreaves Lansdown and Schroders to launch double LTAF offering

Hargreaves Lansdown and Schroders to launch double LTAF offering

From next week

Eve Maddock-Jones
clock 08 September 2025 • 2 min read