What challenges will Mark Carney face at the Bank of England?

Mark Carney

There is to be a new Governor of the Bank of England in July, Mr Mark Carney takes over. The face is not the only thing changing, he promices big changes to policy.

Mr Carney, the man headhunted by Chancellor George Osborne to kick-start the British economy, has hinted strongly at a sharp about-turn in direction.

He has suggested that central banks should switch their aims from controlling inflation and instead putting growth at the top of the agenda. This means that  if inflation rises, interest rates don’t also necessarily have to go up to keep it in check.

The prospect of soaring inflation, combined with rock-bottom interest rates could signal another round of misery for Britain’s savers who have already seen their hard earned savings whittled away by successive rounds of money printing.

A leap in Britain’s current rate of inflation, 2.7 per cent, is on the cards over the next year according to the Investment Director at Fidelity Investments.

He says that it is a big worry. Any investor should be thinking about how to protect themselves now. They need to be invested in assets which are historically a hedge against rising prices.  Equity funds give investors the opportunity to benefit from companies.

A side-effect of any new Bank of England policy could be a falling pound. Sterling has already hit an 11-month low against the euro. Another potential effect is that if markets feel inflation is going to get out of control that could put a further drag on the pound. Companies who export goods are likely to do well because the exchange rate is in their favour.

Funds investing in these sorts of British firms could be a good move for growth-hungry investors. They also will also allow investors to reap an income from dividend pay-outs, Of course the value of equity based investments may fall as well as rise.  Clearly the issue is deciding where and when to invest, either in the Pension pot or Stockmarket based saving in general.

Here's a little more information about our team:

Q: Qualifications Include

A: My degree in modern languages included a module on economics and personal finance, and that's how I got into financial planning.

Since then, I've become dual qualified as both a Certified Financial Planner and a Chartered Financial Planner, including the specialist qualifications in Tax & Trusts (G10) and Pensions (AF3/G60).

The full list is:

AF3 - Pensions (CII) (I did that to totally update my pension knowledge, as I had done G60 in 1994.)
K10 - Retirement Options (CII)
K20 - Pensions Investment Options (CII)
G20 - Personal Investment Planning (CII)
Chartered Financial Planner (CII)
ER1 - Equity Release (CII)
HR1 - Home Reversion Plans (CII)
G10 - Taxation and Trusts (CII)
CFP - Certified Financial Planner Licence (IFP)
H15 - Supervision and Sales (CII) 

In November 2016 I added the STEP (Society of Trust and Estate Practicioners) Certificate for Financial Services.

Q: Do your clients have anything in common with each other?

A: They are all lovely and there are a few similarities in their aims that I've noticed. 

Many of my clients want to do more than just meet their own needs. They also see themselves as custodians of their money for the next generation or for other beneficiaries. 

In other cases, their aim is to manage their wealth efficiently during their lifetime, with the aim of spending it all… but minimising tax on the way there.

Q: What type of work do you enjoy most?

A: I do get a real sense of satisfaction from the work with those clients who engage me to manage the needs of two generations of the same time. That can be 'just' a long-term and balanced investment strategy or it can be trust planning and estate planning to avoid paying too much Inheritance Tax.

Q: Where would you be right now if you weren't at work?

A: In the Lakes

Q: In the film of your life, who would play you?

A: In my head, it's Uma Thurman, but I expect they would approach 'Nursey' from Blackadder II.

Q: Curry or Hot Pot?

A: Agh, too difficult. Curry.

Q: Sherbert or Chocolate?

A: Chocolate

Q: Lawn or Flowers?

A: Lawn

Q: What are you most likely to do whilst being 'on hold'?

A: Infuriate my colleagues by opening conversations then cutting off their reply when my call is answered.