By Nigel Green
The Bank of England’s threat of negative interest rates will encourage market-wise investors to increase their exposure to UK stocks.
The prediction comes as the UK’s central bank on Thursday committed to leaving interest rates unchanged at 0.1% and maintaining its agenda of quantitative easing (QE) – the BoE’s programme buying government bonds and corporate bonds.
The UK’s benchmark fell on the Bank of England’s “unusually uncertain” outlook for the economy. This is a predictable knee-jerk reaction from the markets.
For the time being, the BoE avoided taking the plunge into negative interest rates, instead deciding the less risky measure is to maintain the Bank’s £895 billion quantitative easing (QE) programme.