With inflation falling to just 1.2% last month, it seems increasingly unlikely that interest rates will be heading northwards anytime soon.
In fact, further QE cannot be ruled out, with the UK economy likely to come under at least a degree of pressure due to the precarious situation in the Eurozone.
Of course, this is bad news for savers and income investors, since it means cash balances are likely to be subject to paltry interest rates. However, with the following three shares, you could boost your income and have the chance to make capital gains in the long run.
Here’s how.
Centrica
With a yield of 6%, Centrica (LSE: CNA) has huge appeal as an income play. Furthermore, it has a relatively reliable track record of increasing dividends per share and, with them being set to rise by 2.5% next year, it means that Centrica should provide an income that rises in real terms in the years ahead.
Certainly, political risk remains high, with the Labour party promising to freeze electricity and gas prices should they win the 2015 General Election. Furthermore, a new management team is set to take over at Centrica next year, which places further uncertainty on the company.
However, with a price to earnings (P/E) ratio of just 10.9, these potential challenges appear to be adequately priced in, which means that shares in Centrica could deliver positive surprises moving forward.
United Utilities
With the FTSE 100 being hugely volatile of late, water companies could prove to be a relatively stable investment. After all, water services will be required whether or not the Eurozone uncertainties continue.
Indeed, United Utilities (LSE: UU) could prove to be a relatively consistent investment. It has a beta of just 0.7, which means that its shares should (in theory) change in price by 0.7% for every 1% move in the wider market.
As well as being more reliable than the FTSE 100, United Utilities also has a high-quality and dependable dividend. Shares in the company currently yield an impressive 4.6%, which could prove useful in the current low interest rate environment.
Shell
A change in strategy means that Shell (LSE: RDSB) is aiming to become leaner, more efficient and more profitable. It seems to be moving in the right direction, with recent results being highly encouraging.
Furthermore, Shell continues to have strong cash flow and is able to operate in a shareholder-friendly capacity. For example, it currently yields a highly enticing 5.1% and, with dividends per share set to grow by 3.3% next year, investors should receive a real-terms increase in income.
In addition, with shares in Shell trading on a P/E ratio of just 9.7, capital gains could be on offer, too.