Although the Bank of England’s Monetary Policy Committee has decided not to follow the US Federal Reserve in cutting interest rates, uncertain UK savers could still take the hit. With inflation sitting at 1.9% and the current bank base rate at 0.75%, continuing uncertainty will mean Brits’ hard-earned savings are going to start depreciating in value even quicker.
The potential of a slash to interest rates continues to hang ominously over our heads, with the result of the next announcement in November still uncertain. Should the UK find itself leaving the EU without a deal, the Bank of England may decide to cut the bank rate in an attempt to give a short-term boost to the economy by getting people spending again.
One increasingly popular option for some individuals is to invest in peer-to-peer (P2P) lending – providing they are happy to put their money at risk. Most P2P lenders, such as Growth Street, don’t tie their interest rates to the Bank of England base rate, so a change will not have an automatic effect on the potential return. However, it’s worth remembering that when investing in P2P lending, money won’t be protected by the Financial Services Compensation Scheme.
At Growth Street, we’ve already seen £62.8m invested onto our P2P platform since we launched five years ago.
Greg Carter, Growth Street CEO said:
“The Bank of England rates, though holding for now, still don’t paint a positive picture for UK savers. They remain well below levels of inflation and are still likely to drop further as uncertainty around Brexit and broader political shifts continue to destabilise the economy”
“Interest rates have long sat at rock-bottom, and we’ve seen many individuals choose to put their hard-earned money to work in P2P lending platforms like Growth Street instead.”
“We’re happy to have so many people on board at Growth Street – not only as a way to potentially earn a good return, but also because the money they invest goes to support the growth of SMEs in communities across the country.”