Almost half of investors believe that the attractiveness of stocks will be boosted by reductions to savings account rates.
Further interest rate cuts from the Bank of England will lead to increasing numbers of investors buying shares, analysis from Barclays Stockbrokers showed today.
According to the asset managers, 47 percent of investors believe that a move to lower rates will attract more investors into stocks, while just 34 percent believe that "cash is still king". The remaining 19 percent remain undecided or unsure on the matter.
The Bank of England has lowered its lending rate from five percent to three percent over the past two months and is expected to reduce it again at its monthly meeting later in the week. These cuts are being mirrored in cash savings account rates from UK high street banks, making cash potentially less attractive as an investment.
In turn, this could lead to increased activity in equities, as they offer rates of return that are less directly affected by interest rate changes. Investor confidence in shares has been knocked by the global credit crunch, however - which has led to stock markets losing around 50 percent of their value, worldwide.
Barbara-Ann King, head of proposition at Barclays Stockbrokers, said: "Despite investors experiencing ongoing market volatility this year, it is encouraging to see they are continuing to see the value in equities.
"Throughout recent months we have seen our clients consistently capitalising on market conditions. While a third of investors still believe that cash is king, nearly half believe equities are now better value following interest rate falls."
