UK Defined Benefit Pension Schemes Should Prepare for Negative Interest Rates

T. Rowe Price
By January 11, 2021 13:22

UK Defined Benefit Pension Schemes Should Prepare for Negative Interest Rates

UK Defined Benefit Pension Schemes Should Prepare for Negative Interest Rates

T. Rowe Price Insights on Fixed Income

Negative interest rates are likely coming to the UK, but you would not know that judging from the markets. Although rates are widely expected to fall, implied policy rates show that the markets do not expect the Bank of England (BoE) to adopt negative rates as a policy tool over the …

Key Insights

  • Implied policy rates show that the markets do not expect the Bank of England to adopt negative rates as a policy tool.
  • We believe the markets are wrong, however, and that UK pension schemes need to prepare for negative interest rates.
  • The Bank of England is already consulting with financial institutions about practical, legal and operational implementation

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T. Rowe Price
By January 11, 2021 13:22

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