Where is the smart money going?

On 1st August 2024, the Bank of England (BoE) cut its base rate from a 16 year high of 5.25% down to 5%. It also officially signalled that the BoE has moved from the pause phase of its interest rate cycle and into a new rate cutting phase.

In 2023 I carried out an extensive piece of research, titled "Investing throughout the interest rate cycle" to determine the winners and losers, in terms of assets and sectors, through each phase of the interest rate cycle. The three phases analysed were:

• the base rate rise phase
• the pause phase following rate rises (which we've just left)
• the aggressive interest rate cutting phase

Of course you have to bear in mind that there was limited historical data to analyse, particularly for the pause phase which we have just left, but the research provided some useful insights.