Foundations and trusts may welcome interest rate freeze

Foundations and trusts might welcome the Bank of England’s decision yesterday (July 8th) to maintain the base rate at 0.5 per cent, where it has been since March 2009.

Resulting low returns on savings could encourage individuals with private wealth to invest resources in foundations or trusts, as changing asset markets might make people reassess traditional money management techniques.

The Bank’s Monetary Policy Committee also voted to preserve the stock of asset purchases financed through central reserves at £200 billion, a policy similarly introduced in March last year.

Socially responsible investment funds may also have found greater popularity in recent times, as a recent report by the National Council for Voluntary Organisations found ’a discernable, if immature social investment market has developed in the UK over the last decade’.

Current discussion over the possibility of raising the base rate centres on fears inflation has not responded to the recession and continues to increase, partially as a result of loose fiscal policy. ADNFCR-2318-ID-19882166-ADNFCR