Adam Oldfield, chief revenue officer at Phoebus, says:

“To see inflation stagnate is not what we wanted, but the most worrying figure is core inflation, which actually rose in May. So, we’re under no illusion that the figure today is enough for the MPC to do anything other than increase rates again. Whether this is the right tactic in the long term is well debated, for some it’s like taking a sledgehammer to crack a walnut. However, after the large increase in swap rates last week and the flurry of mortgage rate rises, it is probably safe to say that lenders have already factored in any increase that is announced tomorrow.

“The news yesterday that the Chancellor has summoned banks to an emergency mortgage summit, after the Prime Minister said there would be no ‘Covid-like’ help for mortgage borrowers, is telling of itself. Getting the banks together to talk about forbearance is a bit like telling your grandmother to suck eggs, especially after the pandemic. With Consumer Duty on the horizon, if they aren’t already, lenders will have to be looking to identify and try to help the most exposed borrowers on their books. Yet, we have a way to go before we hit the eight per cent that was stress-tested into the mortgages that are coming to the end of their fixed-terms this year. In theory, borrowers should be able to afford the current increases, but that may not be true in the current cost of living reality.”