Phoebus comment on inflation rate: "cause for concern"

18 December 2024

Richard Pike, chief sales and marketing officer at Phoebus Software, commented:

“Although expected, this rise probably means any residual hopes in the industry of a drop in the Bank Rate tomorrow can be packed away until the New Year.

“Today’s figure will be a cause for concern for those consumers who have already been tightening their belts due to austerity measures. However, as with the base rate, inflation will also drop in 2025 – it’s just a question of when rather than if. Arrears levels are still under control and this is a good indication that borrowers are prioritising secure debt where they can and lenders are using forbearance techniques where necessary. The expected lower inflation and rates next year will only improve this picture.

“In terms of 2025 gross mortgage lending, even with today’s figures we should expect volumes to be up in most product areas boosted by future lower rates and a generally better economic outlook than we have seen for some time. In particular, volumes in later life lending will increase again next year as more people over the age of 55 who have equity in their homes consider how they can take advantage of it with equity release to improve their later life requirements.”