Earlier this month, the Bank of England’s rate-setting committee announced that they will keep the Base Rate at 0.5%. This somewhat unsurprising news is confirmation for consumers across the UK that they will be struggling to find attractive rates of return from mainstream lenders any time soon.
What does the future hold?
The Bank of England’s inflation report has expressed expectations that a first rise will come around February 2016. Another vote for a rise is expected in the coming months, but the outlook is murky as the current inflation rate is just 0.1%. To add to this, unemployment has increased for the second month in a row, which adds weight to the argument of those rate-setters that belong in the ‘lower for longer’ camp.
How earnings develop in the near future will play a vital role in the Bank of England’s decision to raise interest rates. If earnings increase markedly in the next few months, it will most certainly increase the likelihood of the Bank raising interest rates early in 2016.
Alternative investment methods
By means of an alternative to the disheartening interest rates on offer from high street banks, many investors across the UK are looking towards alternative financing methods to reap increased rates of return. Wellesley & Co is an asset-backed peer-to-peer lending platform that offers alternative investment options for investors seeking just such a worthwhile return. At Wellesley, we are currently offering 6.32% with our 5-year P2P investment term. We also have a range of different products such as the Wellesley Listed Bond, which sees investors taking advantage of tax-free returns though this ISA eligible product.
It is vital to understand that peer-to-peer lending does have its risks and we encourage all investors to be aware that investments made though the Wellesley P2P platform involve lending to businesses and individuals and therefore their capital is at risk and interest payments are not guaranteed if a borrower fails to repay their loan.
Nevertheless, an increasing number of investors are looking towards alternative methods in order to achieve much more competitive rates than those currently being offered by traditional banks.
For more information on the risks and processes involved in P2P lending, please do not hesitate to get in touch with our Customer Service Team on 0800 888 6001, or e-mail us at [email protected]