GROWTH Street thinks that the Bank of England’s decision to hold interest rates this month could drive individuals towards peer-to-peer investing.
The central bank’s monetary policy committee voted unanimously on Thursday to maintain the base rate at 0.75 per cent.
A low base rate trickles down into low interest rates at high street banks, meaning people’s savings are being eroded as they are earning too little interest to offset the current inflation rate of 1.9 per cent.
Furthermore, rising risks of a no-deal Brexit have boosted the likelihood of a rate cut later in the year.
P2P business lender Growth Street has argued that this bolsters the case for P2P lending, as individuals willing to put their capital at risk will be seeking out higher returns.
“The Bank of England rates, though holding for now, still don’t paint a positive picture for UK savers,” said Greg Carter (pictured), chief executive of Growth Street.
Read more: Growth Street has lent out more than £500m
“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.”
The Bank of England also cut its growth forecasts for the UK economy over the next two years and warned that there is a one-in-three chance that Britain will be in a recession in six months, even if a Brexit deal is agreed in October.