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by jcp
Editorial & Advertiser disclosure

New finance study of UK adults reveals:

  • 48% think the BoE should increase interest rate to manage rising inflation – even though that will further increase the cost of living now.
  • 54% concerned they won’t be financially prepared if recession hits.
  • 47% will have to work longer and retire later than planned, if inflation continues to rise.

Research published ahead of online finance education event, the XTB Masterclass 2022.

The British public is split down the middle over whether they would prefer the Bank of England to vote for short-term pain for long-term benefit in today’s interest rate announcement, research has revealed.

A survey of 2,000 UK adults* found that just under half (48%) would prefer to see a rise in interest rates today, to protect the economy long term from rapidly rising inflation, even though it would mean increasing the immediate cost of living.

The study also revealed how fearful the British public was of the coming economic challenges, with more than half (54%) revealing they aren’t financially prepared if recession hits, and nearly half (47%) reporting they will have to work longer and retire later than planned, if inflation continues to rise.

These financial fears have led to a third (33%) recently making investments outside of their pension due to concerns over the UK economy, and more than four in ten (42%) wanting to invest money, but fearful they don’t know enough on how to do so.

The research was carried out by financial brokerage XTB, which educates investors and traders on how to build a strategy which works for you.

XTB Director Joshua Raymond said: “The Bank of England’s final decision on whether to impose more short-term financial pain on the British public, in return for future prosperity, is a difficult one, and the British public is almost perfectly split on which option they’d prefer.

“At a time when the cost of living is far outstripping wages, and when so many businesses are upping their prices to accommodate ever-increasing oil prices, Governor Andrew Bailey will know how hard an interest rate rise will be on millions of struggling families. However, his role demands long term thinking, and his economist advisers will be doing what they can to plot the best path through.

“What’s clear in the research is how financially fearful so much of the country is about what the future will bring, and how people are being forced to change their life plans as the economic situation worsens.”

The research was carried out during a testing period for global markets, after two years of pandemic related measures, and the recent invasion of Russia into Ukraine.

The UK cost of living has skyrocketed in recent weeks, with a cost of $130 per barrel of oil last week forcing prices up further – the highest oil price recorded since the Credit Crunch.

The research was revealed ahead of this weekend’s online finance education event, the XTB Masterclass 2022, which helps investors and traders make more informed financial decisions.

Other findings discovered that over half of people (53%) wish they’d started making financial investments earlier in life with nearly six in ten (59%) wishing they’d been taught more about finance and the economy at school, as this would have helped them in later life.

The study also revealed differences in attitudes amongst age groups. Finance fears were highest amongst under 24 year-olds, with nearly three quarters (73%) concerned they are not prepared for a recession, and more than half (54%) so worried that they’ve made investments outside of a pension. Meanwhile, 35-44 year-olds were most likely to have to delay their retirement plans, as inflation continues to spiral.

XTB Masterclass 2022 speaker and leading financial analyst Patrick Reid said: “We are facing difficult times ahead. Markers indicate the UK is on course to enter recession in Q1 2023, and for it to be the worst we’ve experienced since the 1970s. On our current trajectory, inflation will hit 10% within three months, and potentially reach 15% within a year.

“This will hit those with the least the hardest, and today’s research shows just how underprepared British people are for the impending economic pain. Just as worryingly, it also shows how under-informed they are on what they can do to best protect their families.

“Education is key to being successful with finances, as it provides both clarity on your current situation and certainty over the best way to plan your way to a better future.”

“I would urge anyone who is concerned about having to push back their retirement or support their family in the hard months ahead to take ownership of their own financial education. Those that do will be in the best position to get through any upcoming stormy waters.”

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