Post by gibmike on Aug 7, 2017 21:00:49 GMT
Not being classically trained in economics I suffer from layman's syndrome which causes me to ask "simple" questions so please be kind!
If we would to look at the various possible scenarios of what reasons would cause loan rates to increase, I can only see a few possibilities so let me ask the more knowledgeable:
1) BoE Rate Increase. Am I right in thinking that should we move fro 0.25% to say 0.75% this (all ther factors being equal) would increase loans by a similar amount over time? To be more explicit, if we ever reached say 2% this would have a knock on effect of 1-2% points?
2) Supply and Demand. With the introduction of the smart ISAs flooding the P2P market over the last 12 months it has seen a glut of cash which in turn has pushed loan rates down as platforms compete. Does anyone think that we may have reached capacity with these new ISAs and therefore a possible increase in rates?
3) Market crash/ Brexit/ End of the world scenario. Prices crash, P2P bubble bursts and people flee with their funds. Would the doomsday scenario cause rates to increase in line with risk?
Overall rates seem to be heading south so I am looking for some silver lining scenarios.
Mike
If we would to look at the various possible scenarios of what reasons would cause loan rates to increase, I can only see a few possibilities so let me ask the more knowledgeable:
1) BoE Rate Increase. Am I right in thinking that should we move fro 0.25% to say 0.75% this (all ther factors being equal) would increase loans by a similar amount over time? To be more explicit, if we ever reached say 2% this would have a knock on effect of 1-2% points?
2) Supply and Demand. With the introduction of the smart ISAs flooding the P2P market over the last 12 months it has seen a glut of cash which in turn has pushed loan rates down as platforms compete. Does anyone think that we may have reached capacity with these new ISAs and therefore a possible increase in rates?
3) Market crash/ Brexit/ End of the world scenario. Prices crash, P2P bubble bursts and people flee with their funds. Would the doomsday scenario cause rates to increase in line with risk?
Overall rates seem to be heading south so I am looking for some silver lining scenarios.
Mike
