What to expect from a return to normalisation

What to expect from a return to normalisation

An unprecedented era of low-cost borrowing is drawing to a close, but what does it mean for investors? Simon Crinage, head of investment trusts at J.P.Morgan Asset Management, explores the path to monetary ‘normalisation'.

Interest rates, cut to ultra-low levels to simulate the world economy in the wake of the financial crisis, look set to rise in Britain and America soon. Figuring out the investment implications of rising rates in normal times is tricky enough. Yet times are far from normal. Interest rates have been low for so long that the notion of a rise in borrowing costs seems faintly old-fashioned, rather like rationing or bank charges. In the US, the consensus is for a rise by the middle of next year, while in Britain attention is on the four monthly meetings that coincide with the publication o...