They also serve, effectively, to push money out of the private sector and into the public sector, as investors swap equities for government debt, which they regard as a safe haven.
With little security in the future value of their shares (and in turn the health of their balance sheet), volatile markets can deter companies from making long-term investments. Volatile share prices are more of a issue for companies, whose capacity to invest and spend are affected by the value of their shares. These have been slashed in recent months because they are linked to government bond yields, which in turn have dropped to new lows. Indeed, the FTSE 100 is today worth barely 1.2% more than a year ago.Īnother factor affecting prospective pensioners is annuity rates, which determine how much a pension pays out. COVID-19: Work from home tax break set to end after costs 'spiral to £500m' during pandemic
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