Low interest rate here to stay for 2011

Finance | Kirsty Weakley | 31 May 2011

HSBC’s chief economist has predicted that interest rates will stay at 0.5 per cent for the rest of the year.

Speaking at Mayfair Capital Investment’s Charity Investment seminar last week, Dennis Turner said: “If you leave it alone, inflation will come down of its own accord.”

He added that the economy was more likely to underperform than outperform because recent economic growth was mostly down to consumer spending, which he described as “very fragile”.

Anthony Fletcher, fixed income manager at Aberdeen Asset Management agreed, and added: “You cannot raise interest rates while cutting expenditure without killing the economy stone dead.”

According to Mayfair director James Thornton: “Property can continue to deliver high levels of income, although growth in property values relies on a stronger economy.”

Directory: HSBC | Mayfair Capital Investment Management Limited

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