Phoebus comment on MPC interest rate decision

07 August 2025

Richard Pike, chief marketing and sales officer at Phoebus, says:

“Today’s decision by the Bank of England to cut the base rate is no surprise, given the growing economic pressures facing the UK. Although inflation remains stubbornly high, the MPC is clearly prioritising economic support in the face of slowing growth, rising unemployment and falling consumer confidence.

“Rachel Reeves will, no doubt, have been praying for this cut as it will go some way to relieving the increased pressure she faces about potential tax rises looming at her autumn budget. And it will also provide some relief to mortgage holders, particularly those on variable rates or coming to the end of fixed-term deals as households face higher living costs and tax pressures.

“For the housing market, this decision adds a layer of cautious optimism. While interest rate cuts don’t fix the structural issues around housing supply and affordability, lower borrowing costs do have the potential to unlock activity, especially among first-time buyers.

“That said, persistent inflation, uncertainty over the government’s fiscal plans, and the global backdrop mean that lenders must remain agile. At Phoebus, we continue to support our clients with systems that help them adapt quickly to market and rate changes, enhance operational efficiency, and deliver for borrowers in a challenging and complex environment.”