The Lending News Bulletin: 1-17 August

Our regular digest of the most salient news and opinion on consumer credit,
lending, and regulation

 

Short-term lending and the Ramadan effect | London Business School | 25.07.18

Fascinating article off the back an academic study conducted by the London Business School, whereby researchers found that the average default rate on short-term business loans granted in Turkey within Ramadan was 2.68% – 38 basis points higher than the average rate for loans granted during the rest of the year – 2.3%.

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Bank of England raises interest rates to 0.75% | Sky News| 02.08.18

The news that the Bank of England increased interest rates above 0.5% for the first time in almost a decade won’t have escaped you. The cost of borrowing rose from 0.5% to 0.75% which will have most impact on the 3.5 million people with variable or tracker mortgages. The rise, according to Money Saving Expert will benefit savers as it should increase best-buy rates up on both savings accounts and ISAs.

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Credit card lending grows | Credit Strategy | 31.07.18

In June, consumer borrowing (excluding mortgages) remained stable but the annual growth rate of credit card lending exceeded that of other loans and advances at 9.5% versus 8.5%. This news came before the Bank of England was preparing to announce interest rate rises.

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FCA consults on changes to peer-to-peer crowdfunding lending | Credit Strategy | 30.07.18

Customers buying a mortgage or taking out a home finance product through loan-based crowdfunding have faced a gap in protections, say the The Financial Conduct Authority. The FCA found evidence of “poor business practices in the industry”, which has led to “potential and actual harm”.

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UK unemployment falls to 43-year low but pay growth slows | The Guardian |14.08.18

Unemployment is at its lowest level in 43 years but pay growth is at its weakest since September 2017. Average weekly earnings rose by 2.4% on the year – in line with inflation – down from 2.5% in the previous three-month period. In its slowest rate since January, pay growth excluding bonuses was up 2.7%. The number of people on zero hour contracts as their main job saw a decrease.

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