Richard Pike, Phoebus Software sales and marketing director, continued: “The interest rate rise by the Bank of England today is no surprise to anyone given the way that inflation is spiralling upwards. However, the fact that the vote was so tight and those in the minority wanted to increase to 0.75% is telling for the next meeting. If the Bank starts to raise rates in increments of 0.5% it will not take long for the increase to have a marked effect on mortgage interest rates.

“The cost of living is rising and, with the price of gas and electricity set to increase further, this could be a tough year for many. Although mortgage arrears fell at the end of 2021 the squeeze on finances is likely to be telling in the next few months. Lenders need to concentrate on arrears and collections and ensure they are working to ‘TCF’ guidelines and within approved forbearance parameters. There will be some households that are already finding it hard and lenders should be looking forward and ensure they are communicating with their borrowers before situations get too bad.”