The near demise of in­ter­est rates is a ‘moral is­sue’

The Daily Telegraph - Your Money - - YOUR MONEY - Richard Dyson

en­ders should be en­ti­tled to a fair re­turn on money which they al­low oth­ers to use, and the Gov­ern­ment and cen­tral banks are pre­vent­ing it,” the man­ager of one of Bri­tain’s most widely held in­vest­ment trusts has said, adding to the grow­ing clam­our for the Bank of Eng­land to change tack and for in­ter­est rates to be al­lowed to rise.

Out­spo­ken Robin An­gus, ex­ec­u­tive direc­tor of the £700m Per­sonal As­sets Trust, used the com­pany’s lat­est quar­terly bul­letin to share­hold­ers to lam­bast cen­tral bank poli­cies such as “quan­ti­ta­tive eas­ing” – the cre­ation of money with which to buy bonds – and the re­duc­tion of in­ter­est rates.

“I would say the near demise of in­ter­est rates is a moral is­sue,” he said. He said the sym­bol of cen­tral banks’ ac­tions fol­low­ing the fi­nan­cial cri­sis “should be a bi­cy­cle pump, and the theme song should be I’m for­ever blow­ing bub­bles.

“One of these has been a bub­ble in house prices caused by rates so low they are more a fi­nan­cial in­duce­ment than a fair price for money.

“Cen­tral banks are now glut­ted with bonds, while else­where there is a bond famine. Pen­sion funds are bid­ding for bonds at any price.”

PAT shares trade at al­most £400 and Mr An­gus’s own hold­ings are worth £1.7m. The fund is highly cau­tiously po­si­tioned, with gold and cash ac­count­ing for 30pc.

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