The Bank of England may have held interest rates today, but what happens next is far from clear and is expected to hinge on the outcome of Brexit. Many believe a no-deal Brexit could lead to a cut in interest rates to soften the blow. However, if we have a smoother Brexit, interest rates may go up to stop the economy from overheating, and we know that any rise in interest rates may result in an increase in customers struggling with mortgage payments leading to increased levels of arrears.
We’ve been planning for every possible outcome, ensuring we have the right balance between our people and their capacity, and being able to respond quickly to any increases so that our clients - and importantly their customers - can continue to rely on us to support them no matter what might happen next.
What is the outlook for interest rates?The MPC's forecasts for steady growth, inflation and employment are all based on the assumption of a smooth Brexit, in which the UK leaves with a deal. It said that in this scenario it "would be appropriate" to raise interest rates to stop the economy from overheating. However, it also spelled out the implications of a no-deal Brexit for the first time, stating that it would probably lead to slower growth, higher prices and a weaker pound.
unknownx500
