Moody's: Sterling-linked inflation is credit negative for UK non-conforming mortgage and auto loan securitisations
London, 15 November 2016-- A rise in UK inflation on the back of a sterling depreciation will be credit negative for securitisations backed by mortgages, auto loans and other consumer debt, primarily through an increase in defaults among low-income borrowers, says Moody's Investors Service. "Price increases affect low-income borrowers mostly because they are less able to absorb higher costs. Potential mitigants for inflation, such as incurring more debt or wage increases, are...
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