Comment from MorganAsh on the BoE’s announcement to raise interest rates to 5%

Bank of England base rate comment from MorganAsh

Andrew Gething, managing director of MorganAsh said: “With every recent MPC decision came much talk of rates reaching the peak. However, today’s decision in light of sustained inflation, shows that peak may now be some way off yet. Mortgage pressures are claiming many of the headlines at the moment as swap rates react to market expectations and lenders reprice accordingly. With Consumer Duty just weeks away now, financial vulnerability will be key, especially for those on tracker or variable-rate mortgages and those looking to remortgage with higher rate, higher price fixed-rate products.

“But it shouldn’t be the only focus as Consumer Duty expands the scope of vulnerability firms must consider, monitor and evidence. Being alive to the challenges facing vulnerable customers means considering health, lifestyle and relationship challenges such as divorce, domestic abuse and so many others. Without a consistent way to monitor, it will be much harder for firms to meet the new rules.

“As more consumers potentially fall into the vulnerable category with base rate rises, inflationary pressures and lifestyle changes, there’s no room for complacency when it comes to meeting the requirements of Consumer Duty. While looking after vulnerable customers has long been a priority for many, the expectation is now far greater.”

Published: 22 June 2023