Dust settles on Brexit; A first impression!

brexit

So we have a new prime minister with a mandate to take us out of the EU. Cutting through all the hype, rubbish and press speak, what does it actually mean?

Well you have to look at short, medium and long term and then consider things outside of the UK’s control. So really we need to look at the very short term and make a few assumptions, as anything else is too complex and too uncertain. So just a few things to consider;-

 

  1. We are wedded to the EU for at least 2 years so the big saving of £350m/week “as advertised” is at least 2 years away. And as we know – BORIS LIED – about this and any saving when it does come is likely to be about £150-200m/week (or less if UK based, EU supported projects are maintained), but we can ignore it in the short term whatever.
  2. So the pound has hit a 30 year low against the dollar and a pretty poor exchange against the Euro;  so what?
    1. Well for a lot of imported goods, services and commodities priced in $ or € it means they just got about 20% more expensive by the time they get to you.  Though you might not see all of this increase, or see it that quickly,  it affects just about everything from food, transport and fuel/energy to clothing and consumer goods.
    2. Inflation is likely to increase over the short term; yes, your purchasing power has just been reduced. It’s like taking a pay or pension cut…………
    3. Holidays abroad? You are probably protected from any change if you booked some time ago, but your spending money in Europe or the US has decreased by about 18% over last summer; so a few less beers, or why not leave the kids at home with grandma?
    4. If you are living in the UK and sending part of your sterling wages home to Africa, America or most of Europe you will have to spend more ££ to send the same amount home in local currency…… or be forced to send home less for the same sterling amount.
    5. If you work for a small business buying goods from overseas but selling into a competitive UK marketplace; well their business costs just went up and if they can’t pass them on expect some of these employers to go bust and your job with them. Yes, most pundits expect unemployment to increase. But hey think positively if you are a UK citizen you can do a job like fruit picking, or hospitality currently done pretty well by EU citizens and loathed by brits? Might also mean living away from home in a caravan for a few weeks?  Yeah, I know, bad idea.
    6. Travelling to and spending in the UK just got cheaper for foreign visitors so we might expect tourism to do well. And our museums are free……………… for the moment.
    7. Red tape will stay exactly the same
    8. Interest rates are likely to stay the same or fall a little in the immediate term,  but in the short term they are likely to rise due to inflationary pressure and a weakening of the international rating for UK government borrowing. And expect the new “government” to borrow more than Georgie ever planned!
    9. Got a big mortgager? You may be looking at a double whammy of increasing mortgage rates and a reduction in house values (in real terms or by house inflation lower than general inflation); some may welcome this……………………… but others won’t and it may have a destabilizing effect. Anyone remember negative equity?
    10. Tony Blair will have a change of heart and apologize to the UK and Iraqi people before jumping off Westminster Bridge.  We should all remember that right or wrong he made the decisions that allowed this country to function; it is an unenviable job and anarchy (or Communism ‘according’ to Jeremy Corbin) is a really bad alternative, unless you can remember the 1970s/80s and ‘Red Robbo’ and ‘Degsy’  (Derek Hatton)…………….. in which case it’s an even worse idea. Really!!
    11. So you are a white, teenage male of British extraction. Actually, nothing has changed; you are statistically going to do worse academically than a girl of equivalent age or boy of overseas origin; see, you just don’t have the drive, ambition or respect for anyone but numpties. Of course this is just a statistic. Oh, and if you learn to drive and buy a car you are also more likely to kill yourself.  Just a statistic………………………..
    12. Joe Bamford; where are you now?  Oh yes, still in Monaco.

 

Well Peeps just a couple of things to chew on. Maybe I will find 2 minutes tomorrow to write the good things down……………….. but as Boris and Gove promised them to you, they are going to be a long time coming. And if you voted Brexit and are a male aged 77, then I am afraid you won’t see any benefits, even if they do come, because you will be dead in 2 years’ time……………….well, statistically at least.

Cost of Alternative Consumer Borrowing

A huge drop in payday loans given out to people short on money has increased fears of a rise in borrowing from illegal lenders. Yet safer, cheaper ways to borrow do exist and they should be your first port of call if you’re looking for some quick, short-term cash options.

 

Fall in payday loans

Today’s report by the Consumer Finance Association (CFA), the trade body that represents short term lenders, says eight out of ten short-term loan applications are now turned down.

CFA figures also show the number of payday loans given each month in 2015 is 70% less than in 2013.

This fall in people receiving payday loans follows tighter regulation of the industry. This includes new rules introduced last January that caps the fees and interest that can be charged to no more than double the amount borrowed.

 

Loan shark dangers

If you’ve been turned down for a short-term loan, it’s no surprise you may look elsewhere for the money.

The CFA report suggests that 4% of people who are rejected for short-term lending go to unlicensed lenders instead. The same survey also showed that more than three quarters of people are unable to tell if their lender was licensed or not.

If you search online, for a loan, watch out for websites which look legitimate but are really based overseas. They won’t have to follow the new regulations capping fees and charges, so you could end up paying far more than you expect.

However, loan shark lenders are probably the worst option. Though these illegal lenders will often start out friendly and supportive, not only are interest rates far more than elsewhere, missing payments could lead to harassment or pressure to borrow more money to cover costs.

 

Alternatives to payday loans

Instead of going down these routes and taking on additional debt, consider all the alternatives available first.

Depending on why you need the money, you’ll find lots of different options. You might even find you don’t need to borrow money at all.

Below is an example of the costs of alternative consumer borrowing;

 

LFgraphic_borrowing