BoE base rate: “When the cut does come, it will be too little, too late”, says Phoebus

Please find below, a contextual comment on the Bank of England base rate decision from Adam Oldfield at Phoebus Software, the mortgage servicing provider for financial institutions.

Adam Oldfield, chief revenue officer at Phoebus Software, said: “Sticking at 5.25% has its own rationale. Concern remains high around the ongoing issues of a tight labour market and wage growth settlements, which continue to outpace inflation - despite its slowing and then yesterday dipping to 3.4%, which is still a way off the Bank of England’s target of 2%.

“The US central bank made a similar decision yesterday, holding their key interest rate between 5.25% and 5.5% - the highest it’s been in more than two decades. Like the UK, the US market is also anticipating a rate cut later in the year. But for now, caution seems to be the way to play it. A lot of lenders are questioning the sagacity of that, with the worry being that when a cut does come, it will be too little too late.”

Published: 21 March 2024