UK Investors Will Benefit From Peaking Dollar


Money&Co. CEO, Nicola Horlick, yesterday examined the implications of low oil prices on US stocks and interest rates. Today, in the second part of her postcard from New York, she looks at the ramifications for UK lenders, investors and consumers.

MoneyCoBlogLogo

The fact that US interest rates are not likely to rise in the near term should mean that the dollar has peaked in the short term. This is good news for UK manufacturers as they generally buy their raw materials in dollars and sell in euros.

The strength of the dollar against sterling and the extreme weakness of the euro had been causing problems for UK exporters, so it is hoped that this position will improve. Lower oil prices are generally good for manufacturers.

The UK consumer, like the US consumer, has benefited from lower petrol prices. The overall benefit has been less as there is more tax on petrol in the UK, but the benefit is still meaningful. This combined with a real increase in wages is contributing to a sense amongst British workers that they are finally beginning to feel better off, which is likely to help the Conservative party in the forthcoming election.

For UK savers, there is still no sign of higher interest rates and so the search for yield continues. Money&Co.'s book of loans is currently providing an average return before fees of 8.83 per cent.

This will increase when the current auction closes. After allowing for the lender fee, the return reduces to 7.83 per cent, but this is still an excellent return given that inflation is only 0.3 per cent. It is clear that the interest rate environment is likely to remain bleak for savers for some time and so lending to companies through Money&Co. is a sensible way to get more income.

 



FOLLOW NICOLA ON TWITTER
FOLLOW MONEY&CO. ON TWITTER

Search blogs

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More from blogs

2019
2018
2017
2016
NovemberOctoberSeptemberAugustJulyJuneMayMarchFebruaryJanuary
2015
DecemberNovemberSeptemberAugustJulyJuneMayAprilMarchFebruaryJanuary
2014
DecemberNovemberOctoberSeptemberAugustJulyJune

Search news

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More news

2019
DecemberNovember
October
September
August
July
June
May
April
March
February
January
2018
DecemberNovemberOctoberSeptemberAugust
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
MayMarchFebruary



Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.