A month ago, it looked almost certain that the Bank of England would raise interest rates amid a raft of encouraging economic data pointing to growing wage packets and falling unemployment.
However, the mood began to change in the middle of April when a slowdown emerged in the pace of inflation. That took some pressure off the Bank of England’s Monetary Policy Committee (MPC), which is tasked with keeping consumer price rises in check.
The case against an interest rate hike was strengthened further when figures showed that the UK economy grew by just 0.1% during the first three months of the year – the weakest performance for more than five years.
As expected, the Bank of England’s MPC today voted to keep the base rate at 0.5%. It has remained unchanged since November 2017, when borrowing costs were hiked for the first time in more than a decade.
Think outside the bank
Stuart Lunn, co-founder and CEO of LendingCrowd, said the decision will “maintain the strain felt by hard-pressed savers”, many of whom continue to see the value of their nest eggs eroded by the rising cost of living.
He added: “The rate of consumer prices inflation may have slowed to 2.5% in March, but it remains higher than the Bank of England’s 2% target and well above the interest rates offered by easy-access cash accounts.
“For those seeking an alternative to cash savings, peer-to-peer lending could be the answer. By using an online platform such as LendingCrowd, which is fully authorised by the Financial Conduct Authority, investors can make their money work harder by lending directly to business borrowers in return for regular repayments of capital and interest. It’s time to think outside the bank.”
Make your money work harder
With a minimum investment of £1,000 and a target return of 6%* a year, the LendingCrowd Growth ISA instantly creates a diverse portfolio of business loans for you. The platform automatically reinvests your returns in additional loans, further increasing your diversification.
If you’re looking to generate income from a lump sum without eating into your capital, our Income ISA could be ideal. It targets a 5.6%* return and lets you withdraw your interest – with no fees – while your capital repayments reinvest automatically.
We designed our Innovative Finance ISAs to be flexible, so if you decide to withdraw money, you can replace the amount withdrawn without affecting your annual ISA subscription limit, which for the current tax year stands at £20,000**.
It’s easy to transfer existing Cash, Lifetime, Stocks & Shares and Innovative Finance ISAs to us. You can make either full or partial transfers from ISAs opened in previous tax years, and full transfers from ISAs opened this tax year.
By thinking outside the bank and joining thousands of other P2P investors, you can generate real benefits for the British economy. In return, your money has the opportunity to work harder for you.
*Capital at risk. Target rate is variable, net of ongoing repayment fees and bad debt.
**Tax treatment depends on the individual circumstances of each investor and may be subject to change in future.