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A briefing paper from the UK Parliament, entitled ‘Interest Rate Swaps on Business Loans‘, claims that the growth of individual complaints combined with increased media interest indicates that a financial scandal may be brewing. Its primary concern is over business loans with attached interest rate conditions.
These loans have proven to be very expensive when compared to the rest of the market. As a result, many business owners have claimed that the extraordinary economic backdrop and poorly understood and complicated financial contracts have left them paying exorbitantly high-interest rates. The report claims this has occurred due to a fall in interest rates following the financial crisis.
The economic indicators for July have revealed that the UK has experienced accelerated yet moderate growth, an increase in employment, and a faster growth of inflation than normal. Over the last financial quarter, the UK economy has grown by 0.3% whilst gross-domestic-product has grown for eighteen consecutive quarters.
The financial services authority is looking into this issue.