Bank of England keep rates on hold, hints at rises

the FCA said.

The regulator said it was also concerned about barriers to market entry, preventing smaller, newer consultants from winning business and that “vertically integrated” business models were creating conflicts of interest.

As well as helping clients pick which asset classes and funds to invest in, many consultants now also offer to invest the money themselves.

This move into so-called ‘fiduciary management’ can mean consultants are in direct competition with other managers they are hired to independently assess.

The FCA said in November 2016 it was minded to refer the sector to the competition watchdog, and in June this year added that it was expected to reject a package of undertakings proposed by the big three consultants in a bid to head off a full competition probe.

Danny Vassiliades, managing director of smaller rival Punter Southall Investment Consulting, said the FCA’s referral was good for the industry.

The Bank of England opted yesterday to keep interest rates at a record low but delivered a big hint that borrowing rates could be raised sooner than many in financial markets currently think.

In a statement accompanying its decision to maintain its base rate at 0.25 per cent, the Bank of England said its Monetary Policy Committee voted 7-2 in favour of no change. That was in line with market expectations after a run of economic data that has shown the British economy slowing down.

Still, it’s clear that rate-setters faced a dilemma during their deliberations given that inflation is running way above its 2 per cent target at 2.9 per cent. Under more normal times, that would usually be justification enough for a rate hike. However, the majority of the panel urged caution in light of a slowdown in the economy and uncertainty over Britain’s exit from the European Union.

Economic figures this week have highlighted the dilemma. While inflation is above target, wage rises remain subdued, meaning that household incomes are being squeezed, a development that should lead to lower inflation.

Despite adopting a cautious approach, the minutes to the central bank’s policy decision showed that the panel is ready to raise interest rates.

A financial adviser visiting a senior couple in their home. Britain’s competition regulator has launched a probe into investment consultants following concerns about conflicts of interest.