Rates cut will flush out saving accounts -- F&C.(F&C Asset Management, interest rates)

Financial Adviser, August, 2005

THE equity market is waiting with bated breath to see if the interest rate reduction will flush investors back into the sector.

The Bank of England's decision to drop the interest rate to 4.5 per cent should cause consumers holding money in building society or bank accounts to look elsewhere to earn them money, according to Jason Hollands, head of communications for F&C Asset Management.

He said: "You would expect that the rate cut would flush people out of the savings accounts. Seeing the rate lowered, they should look to other forms of interest earning vehicles such as equities.

"The interesting thing is a number of industries have made record numbers. They have been hitting levels they have not seen in years; we are certainly back in a bull...

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