The clock is counting down for our formal departure from the EU on October 31 – at the time of writing, that’s only 10 short weeks away. With Boris and his crew currently occupying the UK driving seat we are pledged to leave on the appointed date, whatever the consequences. In the opposing corner we face similarly implacable EU negotiators determined not to budge one inch towards offering us a better deal. With perceived loss of face and/or authority a serious factor in the mix, will common sense prevail or will stubborn intransigence lead to a messy departure? We may have an opinion, but we just don’t know the answer.
Depending on your point of view, either a ‘no deal’ outcome will spell disaster – even the Governor of the Bank of England, Mark Carney, is voicing grim warnings about a short-term economic shock wave – or it will mean economic liberation and a new era of prosperity for Britain. Powerful voices are speaking out in favour of both arguments. Even the US has entered the fray by dangling the prospect of juicy trade deals when we finally leave. Donald supports Boris, and vice versa – easy to mock, but perhaps not to be sniffed at. However, politicians come and go and it will probably be years before we know whether we took the right path.
Meanwhile, while we all try to make sense of the political mess, what we know for sure is that some of the world’s major economies (including our own) are teetering on the edge of recession. The pressure is increasing for a drop in interest rates to stimulate growth. If that occurs here then I have no doubt that the banks will move quickly to punish savers, but will be less eager to help borrowers. It follows that the hunt for yield will, if anything, intensify.
Ironically, we have many of the ingredients that brought the alternative finance industry into being in the first place. Details of our final departure from the EU may turn out to be unsatisfactory. However, everyone running a business will know finally what they have to deal with, the brakes can come off and they can make plans for the future – a scenario that will separate the wheat from the chaff. Good companies should have no problem in sourcing the finance they need to grow.
Personally, I am looking forward to the time when our critics will no longer be able to claim that P2P lenders have never faced an economic downturn. We’re experiencing one right now.