March 11, 2020 / 5:39 PM / 3 months ago

AJ Bell warns of possible hit from market slump, BoE rate cut

March 11 (Reuters) - Investment platform AJ Bell said on Wednesday it would be difficult to gauge the impact of the coronavirus outbreak on global stock markets and the effect that Bank of England’s interest rate cut would have on its trading performance.

The negative impact on revenue and pre-tax profit until September 2021 from the base rate cut will be partly mitigated, the company said, adding any hit beyond that will depend upon the length of time for which the reduction remains in place.

“The impact may also be mitigated further by future management actions and influenced by related changes in customer behaviours, such as the level of trading activity and the extent to which customers hold cash balances,” the company said.

AJ Bell said any impact largely depends on how long the virus outbreak lasts, whether stock markets remain at or below current levels and if Britain’s base rate remains at 0.25%.

The Bank of England slashed interest rates by half a percentage point on Wednesday and British finance minister Rishi Sunak said he would do whatever it takes to support the economy as it faces a likely temporary disruption over the virus outbreak. (Reporting by Samantha Machado and Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta)

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