As a platform, we take great pride in all that we've achieved since opening our doors for business nearly six years ago. We’ve
The Brexit economy – two months later
Depending which newspaper you're inclined to read, the fallout from the Brexit vote on 23 June has been packaged and interpreted in a variety of ways. Yet, poorly-disguised agendas aside, there is a lot to digest from what has occurred over the past two months - both positive and negative.
Notwithstanding the fact that it is far too early to be making any steadfast predictions about what the future holds, with two months having now elapsed since the historic EU referendum vote, we thought it a good time to take stock of where things are at in terms of the different facets and sectors of the UK's economy. So, in the interests of neutrality, we've decided to list five things to make you feel cheery, and five to feel wary.
On the plus side...
- Borrowing is getting even cheaper: For those in the market for secured and unsecured credit, not to mention homeowners with variable rate mortgages, the post-Brexit cut in Bank of England rates will likely help to make your loans even more affordable for the foreseeable future. Added to that, the concurrent cash injection into the economy should keep to things moving for now.
- The stock market's holding its own: The stock market is a sensitive beast, with the only constant being the variables in performance across the spectrum. But few would have expected the major indicators such as the FTSE 100 and FTSE 250 to fare as well as they have since 23 June.
- We're still growing: Survey data last week showed that UK consumer spending actually increased for the month of July. Consumer confidence is one of the most powerful lines of defence against a recession, and all signs are that this has not been dented. But steady growth has also been recorded in both the manufacturing sector and building industry, suggesting a slowdown therein is not exactly imminent either.
- Property holds steady: Initial fears of a sudden slump in the property market have yet to materialise on a wide scale. Estate agents here and there have reported declines in prices and sales, but the latest report from HM Revenue & Customs confirmed that sales of houses in July showed no significant signs of drop-off compared to June, suggesting that there is little panic among buyers at this stage.
- The British powerhouse: It isn't about nationalism; mere observation of fact. A country with 65 million consumers - many of whom would be considered affluent by global standards - is unlikely to suddenly dip into severe recession at the drop of a hat. Added to this, signs are positive that even if full access to the EU single market were to be terminated, other major countries are ready and willing to do business.
And now for the down side...
- The decline of the pound: Exporters will be smiling about it, but the fall in value of the pound to a 31-year low will have a noticeable impact on most consumers. Aside from increased costs of travel, an import-heavy island like Britain will likely see prices of consumer goods rise as a result, and inflation data suggests this is already happening.
- Saving misery: Lower interest rates are great news for borrowers. But for savers and pensioners, who've endured nearly a decade of scandalously low returns on their money, the picture is becoming all the more grisly, and the spectre of negative interest rates will cause even more chills down the spine.
- That pesky deficit: George Osborne departed the Chancellor of the Exchequer’s office with few adoring fans. But while replacement Philip Hammond's expected confirmation that his predecessor’s plans for running a budget surplus by 2020 will be scrapped is a necessary step, it does mean that the already frightening national deficit looks set to balloon further over the coming years.
- The fear of the unknown: Uncertainty is the enemy of any economy, and right now, Britain has it in abundance. When Will Article 50 be triggered? What access will we have to the single market? Can we negotiate a deal within two years? What will life outside the EU look like? How long will it take to secure trade deals elsewhere? Will big banks and big business head to pastures new? In short, we just don't know.
- The worst could be yet to come: Many people fail to consider that Britain hasn't actually left the EU yet. But, already, there have been seismic impacts on the UK economy across the spectrum. And with the world's economy in a fragile state, the possibility that such shocks could be amplified when the divorce with the EU actually occurs in earnest is difficult to dismiss.
Take from the above what you will – the glass could be either half full or half empty. Undeniably, these are fascinating and unpredictable times, and Brexit represents one of the biggest economic shakeups in the modern era. The reality of economics is that most stimuli have both positive and negative ramifications, and what’s good for one sector can be catastrophic for another. Let's hope that, with the fallout from the referendum still very much in its infancy, the impact of Brexit delivers more of the former, and less of the latter to the UK economy in the years to come.
- Base rate cuts: What does it all mean?
- Our lenders show faith in P2P lending after Brexit vote
- Looking after your pension pot post-Brexit
Get email updates for future blogs:
Our website offers information about saving, investing, tax and other financial matters, but not personal advice. If you're not sure whether peer-to-peer lending is right for you, please seek independent financial advice, and if you decide to invest with Lending Works, please read our Key Lender Information PDF first.
Since opening our doors back in 2014, we’ve always prided ourselves on living and breathing two key principles at Lending Works: innovation, and putting the customer first in everything we do.
With the retail sector enduring its fair share of challenges, companies are looking at new ways to attract customers, and drive conversion. In an overcrowded, dog-eat-dog marketplace, with behemoths such as Amazon flexing their muscle, it’s easier said than done.
On 4 June 2019, the Financial Conduct Authority (FCA) released its new regulatory framework for peer-to-peer lending (P2P); a Policy Statement known as PS19/14. As you might imagine, it's a document which, following a three-month consultation, is a hefty read of no fewer than 102 pages.
In a difficult climate, customer acquisition and lead generation present stern challenges for UK retailers, and a great deal of marketing spend invariably gets directed towards getting feet through the door.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
January tends to be a comedown following the Christmas festivities, and, from a personal finance perspective, a time for many Britons to lick their wounds. In particular, for those who’ve over-extended their credit card, it may feel like the walls have started to close in.
A new year, and indeed a new decade has dawned. Reflecting on 2019, what seemed to have got lost in the noise and political hysteria was the fact that the UK economy actually held up remarkably well.
As the good times rolled in the mid-2000s, only a precious few sounded the alarm as lending became increasingly reckless. Northern Rock's infamous 'Together' 125 per cent mortgage epitomised the rush for high loan-to-value (LTV) deals at a time when it was thought that house prices would just keep going up forever.
For those with an eye on the economy, 'GDP day' is always one to mark off in the calendar each month. And it's been a hot topic for the UK in 2019, with the latest update showing zero growth for the period from August to October.
One of the perceived strengths of the auto-enrolment pension scheme is its simplicity – indeed, it is actually a greater effort for an employee to opt-out of a workplace pension than it is to be enrolled into one. No further actions are required, and the retirement fund grows as the months and years pass by.