What could the expected rise in interest rates mean for investments?

Some feel Insurance Companies will be one of the largest beneficiaries of any rise as they invest heavily in fixed-interest securities, which would yield higher returns following a rate increase. Conversely the Utilities sector is one that experts are sceptical of, with rising rates making them even more unattractive due to their regulated returns.

Some Investment Managers believe the House Builders may well suffer from a rate increase, as fewer people will want to buy houses if mortgages become more expensive. This could hit this sector hard, with construction having only picked up in recent years following 2008.

It’s also been predicted that rising rates could further weaken UK retailers, with shoppers already turning their backs on the high street in favour of online retail giants. But, with a possible rate rise, weaker pound and stagnant wages, shopping and credit could become increasingly expensive for many.

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