Comment from MorganAsh - interest rate rise 22 March 2023

Following the Bank of England’s announcement to raise interest rates from 4% to 4.25%, we have a comment from MorganAsh.

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: “While it seemed like inflationary pressures were continuing to ease, the news of a surprise jump in inflation last month was clearly enough of an excuse for the Bank of England to make another increase. Without this, the expectation was the MPC would look to hold rates, signalling that this may well be the last for a while. 

“This will be of little comfort though to the more than 1.6 million households on either tracker or variable mortgages. Thanks to today’s decision, they will once again see an almost immediate impact on their monthly mortgage payments. That’s on top of a rise in other outgoings, mainly food costs. 

“At all levels across financial services, it’s once again a reminder that firms must be alive to challenges facing those vulnerable customers who will be most susceptible to harm. After all, the upcoming Consumer Duty regulation brings with it the obligation to not only identify but monitor the vulnerable characteristics of all customers throughout the lifetime of the product. 

“This goes far beyond financial vulnerability to include all potential health, lifestyle and relationship issues. Without the correct data, processes and technology in place, firms cannot mitigate the risk of harm, deliver fair value or ensure good outcomes for customers – key requirements of the regulator. The prospect of a pause in rate rises in the future will not be enough to stop more borrowers potentially falling into the vulnerable category.”