The Bank of England has announced a rise in interest rates from 0.5% to 0.75% following a unanimous decision by its Monetary Policy Committee.
Finance mis-selling will create ‘perfect storm’ in 2018 according to the boss of fleet management business who has claimed that car dealership sales staff “don’t know how PCP and PCH deals work”.
Inflation rose to a six-year high of 3.1% in November as retailers struggled against a squeeze on shoppers finances in the run-up to Christmas.
Threats to car finance firms and demand for new and used cars have been highlighted once again after the Governor of the bank of England warned that inflation might peak at over 3% next month.
Analysts from Cap HPI have briefed staff from the Bank of England on the current condition of the UK new and used car markets.
The Bank of England has told car loan providers they are at the risk of action against reckless lending due to the ‘spiral of complacency’ from lenders.
Car retailers have come under fire for their approach to finance sales after undercover newspaper reporters found sales executives were offering new car PCPs to and minimum wage earners and the unemployed.
The Bank of England has told banks to set aside an extra £11.4 billion to protect the economy from a financial crash as car finance and credit card debt lending continues to “increases rapidly”.
The Bank of England has confirmed that it considering more stringent regulations which would usher in strict affordability checks in a bid to avoid a PCP-prompted financial crisis.
The NFDA has welcomed the Bank of England’s decision to leave interest rates at 0.25%, stating that it “protects the interests of our industry”.
UK interest rates have been cut from 0.5% to 0.25% to the lowest level recorded.
NatWest has written to businesses to warn it may have to charge to accept deposits if interest rates are cut below 0%.
The Consumer Prices Index – which measures changes in prices – fell by 0.1% in the year to October 2015, according to the Office for National Statistics.
