Richmond upon Thames Council has updated its treasury management strategy to reflect the anticipated impact of falling interest rates on investment returns. The Finance, Policy and Resources Committee met on Thursday, 12 February 2026, to discuss the annual update of the strategy, which sets out the policy for the coming year.
Officers presented a report detailing the proposed changes to the Treasury Management Strategy and Policy for 2026/27. A key proposed amendment is to allow for the opening of additional Money Market Funds (MMFs) for investments. This change is intended to provide greater flexibility in managing cash flow and securing advantageous investment opportunities, particularly as interest rates are expected to continue to fall.
Fenella Merry, Executive Director of Finance, explained that while the council has seen really good returns in Richmond and one of the highest in London over the past year,
these returns have started to decrease as bank rates have begun to drop. The proposed change to allow for additional MMFs is not about widening the range of credit ratings accepted, but rather about providing more flexibility for investment returns.
Councillor Nancy Baldwin raised a question regarding the use of AA-rated entities versus AAA-rated entities for investments. Merry clarified that the council has always accepted a range of credit ratings and that limits are in place for percentages under each criterion. The amendment is intended to offer greater flexibility on returns rather than widening the credit ratings accepted.
The committee recommended the proposed changes to the Treasury Management Policy, Strategy, Investment Criteria, and Prudential Indicators to the Council for approval.
