Phoebus comment on inflation

20 August 2025

Phoebus Software’s chief sales and marketing officer, Richard Pike, says:

“Today’s rise in inflation adds weight to forecasts that price growth could reach 4% later this year, well above the Bank of England’s 2% target. This will, in turn, cast doubt on how quickly the Bank can move on interest rate reductions, with Governor Andrew Bailey recently warning that cuts must be made ‘gradually and carefully’. For borrowers, any delay to rate cuts means higher repayment pressures for longer, particularly for those on variable rates or coming to the end of fixed deals.

“The FCA’s recent move to ease affordability requirements may stimulate activity among prospective buyers and those remortgaging, but its true impact is yet to be felt. Many borrowers on existing deals will continue to face affordability challenges, particularly as fixed-rate terms expire. In this climate, agility is essential. Lenders that have the right technology to manage risk, respond to changing market sentiment, and deliver a seamless customer experience will be best placed to support brokers and borrowers through ongoing uncertainty.”