4 March 2010
The Motley Fool comments on the Bank of England interest-rate decision
Leopards never change their spots
David Kuo, Director at popular financial website The Motley Fool – Fool.co.uk, says:
“It will come as no surprise that the Bank of England has kept interest rates on hold again. Low rates are the positive aspects of sluggish economic growth.
“But every silver lining has a cloud, and the cloud that looms large on the horizon is the threat of inflation eroding our cash investments.
“Historically, the Bank of England has maintained the base rate above the rate of inflation. This is vital if the Bank is to sustain downward pressure on the rising cost of living.
Source: Bank of England and the Office of National Statistics
“But it seems the bank is now prepared to sacrifice inflation in exchange for economic growth. There is no guarantee that this will work and it is tantamount to walking a leopard on a leash to see if it will make a good pet.
“Leopards never change their spots. Consequently, investors should ensure that long-term savings are invested in inflation-beating assets. Only two investment classes have beaten inflation over the long term, and they are shares and property.”
-ENDS-
For further information and/or to arrange an interview with David Kuo on economic affairs and breaking financial news stories, please contact:
Sonia Rehill on 020 7025 8576 or Soniar@fool.co.uk
An ISDN line is available for radio interviews
About The Motley Fool (UK)
The Motley Fool (UK) is a popular online financial community at Fool.co.uk dedicated to helping the world invest, better.
It is aimed at investors at every level - from complete beginners to seasoned experts, and helps users take control of their financial lives through its engaging editorial content, transparent investing services and vibrant community discussion.
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