MorganAsh comments on BoE MPC decision

14 December 2023

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

Andrew Gething, managing director of MorganAsh, said: “News of another hold on interest rates marks a stable end to an intense year for borrowing. Despite the Bank of England’s own view that this may be the outcome for a much longer period, markets seem buoyed by the long-term outlook for interest rates and the wider economy being far more stable. Economists are even suggesting that markets are pricing in cuts next year with forecast rates edging towards to 4% by the end of 2024. We’re certainly seeing this positivity in mortgages rates, which continue to improve and become more competitive, which is positive for borrowers.

“Of course, this doesn’t mean it’s all plain sailing from here, with many homeowners and consumers set to feel considerable pressure in the coming year. That is especially true for the more than a million homeowners set to remortgage in 2024 onto an improving, but much higher rate than they are used to. With the FCA’s own data suggesting that half of all UK adults are vulnerable, there’s every chance that firms could see a growing proportion of vulnerability among their customer base.

“Consumer Duty is an ongoing priority for the regulator, particularly the treatment of vulnerable consumers. In its latest Regulatory Initiatives Grid and in recent comms, the FCA announced it will be assessing firms progress on vulnerability in Q1 2024. This should sound alarm bells to those firms still reporting few or even zero vulnerable customers, which is a clear concern. In reality, this is a sign of poor-quality data and a lack of a consistent approach to assessing and monitoring vulnerable consumers. With the regulator hot on non-compliance, this has to be a priority for all firms. After all, how can firms identify clients in difficulty if they haven’t fully evaluated their customer base.”