Brexit and Interest Rates
Most consumers and business owners in the UK are now fed up with hearing about Brexit. The complexities and political uncertainties surrounding Brexit since the EU referendum have caused untold stress for employers, homeowners and consumers. What will happen to interest rates is anyone’s guess. A no deal scenario could mean a rise in interest rates, as the Bank of England could be forced to raise interest rates if a deal isn’t found. But the Bank’s official position is that interest rates could move in either direction as it would ‘need to assess which was the greater threat: recession or rising inflation.’
Indeed, no one can doubt the impact of the referendum which has led to the resignation of the UK Prime Minister, Theresa May and a huge drop in the value of pound Sterling. The £ started to rally in early November 2018 when it looked like Theresa May have found a Brexit deal with the EU, but it wasn’t to be.
Business and Brexit
Throughout the Brexit negotiations stock market reactions to the Brexit referendum have been driven by the movements in the unsettled exchange rate. This has caused a great deal of worry and stress for businesses in the UK. After the Brexit referendum result there was a bounce to above $1.28. The pound eventually found its own ‘happy place’ around $1.2860. However, volatile price action continued in the months ahead as events in Westminster played out. On the 8 July 2019 pound Sterling stood at $1.2712 bringing its gains in June to more than 3%. But it’s still near a six-month low against the dollar as investors continue to bet on lower British interest rates.
It’s been an incredibly difficult couple of years for business owners who have struggled to adapt to the potential threat of a ‘no deal Brexit’ and all the additional costs, stress and paperwork that will bring. A press release on the website ‘UK Finance’ highlighted that 1 in 4 small and medium-sized enterprises see ‘political uncertainty as the main obstacle facing their business’.
Businesses surveyed by the Federation of Small Businesses (FSB) in September 2018 also revealed that only 14% of small businesses have started planning for a no deal Brexit. Shockingly, it also appears that 41% believe that a no deal Brexit will have an impact on their business in some way.
How will Brexit impact UK economy?
Most economists seem to agree that a Brexit deal of some sort would be good for the UK economy and that ‘if we do leave with a ‘no-deal’ then economic worries would escalate”. However, in recent weeks and days it looks like a ‘no deal Brexit’ scenario will be averted, although many are still uncertain what will happen next.
The negotiations with the EU look set to continue and on 8th July Philip Rycroft (head of the Government Brexit department) said we should all still ‘worry about no deal’ and that it was “fraught with risk”. Even more worrying is the threats of some UK MPs suggesting we ‘walk away’ from the EU and refuse to pay the bill.
It appears also that many political commentators and politicians don’t seem to know what will happen either. Some even see the Brexit conundrum as a ‘constitutional crisis’ with some even referring to 19th-century parliamentary procedure dating back to 1604!
Lenders and Brexit
It’s true to say many lenders have also become nervous about lending amid the many political uncertainties surrounding Brexit. Most economic forecasts have been gloomy as various politicians continue to spend days upon days arguing over what Brexit deal is best for the UK.
Negotiations look set to continue and a decision needs to reached on Brexit. In the meantime, new lenders are encouraged to compete in the market. Currently, this is dominated by HSBC, Barclays, RBS and Lloyds. These are collectively known as ‘The Big Four’.
Despite all the turbulence it seems the bridging loan market is holding strong. In 2018, £766.9 million given out in Bridging Loans, an increase of £232.8 million on the previous year. It appears businesses have confidence in the market and it maintained favourable liquidity last year.
At Atlantis Loans we recognise that lenders are out to compete but we like to keep things simple. If you’re looking for a secured business loan, or looking to consolidate other debts, try taking a look at some of the many different loans and finance packages we have available. We know the importance of good deals. Our experience in securing loans that suit short term or long term lenders, whatever their particular individual circumstances, is unique in the current lending market.
How we can help you
We’ve already helped lots of people in Britain who have benefited from our fast, no-nonsense service. We will help you find the best deals and best secured loans available to suit your needs. What’s more, we’ll do all those tricky negotiations for you. Being in business over 8 years we have developed excellent relationships with many of the UK’s leading lenders. This includes subsidiaries of the main clearing banks.
At Atlantis Loans we have direct access to many of the most well known alternative lenders in the current market for secured loans. We’ll scour that market (not the Single Market!) to find the best rate loans available to you.
Over the years we have negotiated very competitive terms which we now can pass on to our clients. We can help secure loans to suit your particular requirements and individual circumstances. We’re not going to ‘walk away’ or get you a deal you don’t want, or that isn’t right for you.
If you have issues with your credit history we have a team of advisers who will help you find a loan with the lowest interest rates possible. We aim to seek the most preferential terms available for your personal situation.