MorganAsh comments on BoE MPC decision

03 August 2023

MorganAsh has developed the MorganAsh Resilience System (MARS) to help brokers, advisers and financial services firms better manage and evaluate consumer vulnerability and comply with Consumer Duty.

Andrew Gething, managing director of MorganAsh said: “Today’s decision to raise the base rate was certainly not unexpected. While we have seen inflation improve recently, the momentum is just not quite there yet to give the Bank of England confidence to pause. Pressures in the labour market and with services inflation will undoubtedly remain a key consideration for the MPC moving forward.

“For many borrowers, the hope will be that today’s news doesn’t have an impact on fixed-rate mortgages, which have been showing signs of improvement. This is especially true for the large number still set to remortgage in the near future.

“For those with standard variable or tracker rates, the news of a fourteenth rise to the base rate will be most unwelcome, pushing household budgets even further. With the expectation that this may not be the last rise either, lenders must have a close eye on this group of customers and any others facing difficulty, especially with Consumer Duty now in force.

“The arrival of Consumer Duty is an important reminder to the sector to ensure systems are in place to identify when customers are vulnerable and to protect those who are. Without a consistent approach to identify and monitor vulnerability, it’s impossible to ensure good outcomes for all customers - a clear requirement of the new Duty.”