Comment on interest rates from Phoebus Software

06 February 2025

Richard Pike, chief of sales and marketing at Phoebus Software, says:

“The Bank of England is likely to be aiming for a normalised interest rate of around 3.5% moving forward to appease both borrowers and savers as ‘the new norm’. Today’s cut is a step towards that target rate and will be received well by borrowers on variable rate products. Whether swap rates particularly react to this cut in the longer term remains to be seen.

“What this rate cut will do is encourage economic growth and investment. You’d hope that as well as increasing mortgage originations volumes, this will start to show in major house building projects commencing with a view to creating the housing stock our industry and country needs. From an arrears perspective, following this morning’s good news on Q4 figures, lower rates will only assist lenders maintain portfolio performance.”