Is it about to become a whole lot harder to borrow money? With the debate of increasing interest rates becoming stronger, it is looking likely.
Michael Saunders, one of two members of the monetary policy committee who voted for a rate rise last month, said that the economy could withstand a modest rise in borrowing costs for the first time in ten years.
The main focus of his debate is the uncertainty which hangs over the post-brexit economy. Micheal argues, that it would be wiser to raise interest rates sooner rather than later. In doing so we would avoid a sudden crash in the economy if it took a turn for the worse. He warned that if early action was not taken, rate rises might have to be sharper later to prevent the economy from overheating. This could cause a shock for homeowners, many of whom have never had to face a rise.
Moreover on increasing interest rates, Erik Britton, a former Bank of England economist agreed. He said, ”If we can’t do it when inflation is above target, when unemployment is at it’s ‘natural rate’ and whilst growth is reasonable, I don’t know when we’re going to do it”.
Accordingly inflation is above the Bank’s target of 2 per cent, coming in at 2.6 per cent in July. Mr Saunders was in agreement with Britton suggesting, it will rise above 3 per cent soon and will stay above target for an extended period. Therefore, this is the idealistic time to increase them after a record low.
How acorn.finance can help if this affects you…
If the Bank of England do increase interest rates, it would mean that borrowing from mainstream banks will become even more stringent. As well as costing you more in the long-term. Which is where acorn.finance can step in. With a pool over around 250 lenders we can find you the best deals with the lowest rates – tailored around you and your business plan.
This raise in rates may sharply affect your business. Whether it makes it harder to meet that up-coming VAT payment, or halts your start-up completely. We can cater finance to your needs whilst getting you the best deal. Prepare and plan your needs, both now and the future.
Our experts are trained to listen first, understand your needs and aspirations and then to work with you to arrange the ideal finance solution.