“Today’s GDP figures really do highlight the volatility of the economy and create many questions. A reduction on the previous three months isn’t a huge surprise, and the Bank of England has already stated it expects a recession to happen in at least the short to medium term. Obviously this is against a backdrop of rising rates and inflation going skywards which in turn is causing many workers to strike for inflation matching pay rises. But with GDP reducing, many businesses have less revenues to hand out inflation busting pay deals.
“We will undoubtedly see an influx of inbound communication into various agencies such as Citizens Advice by people not just financially struggling today, but perhaps looking at how they will cope in the future. Could it be the right time for lenders and banks to upskill certain staff to be able to give more generic, non-regulated advice on household budgeting and understanding in detail the areas of support that are available today or measures that are coming down the line to be able to engage with customers that are concerned? This sort of proactive behaviour will certainly give early sight of potentially problem cases, but as importantly, will build borrower loyalty and be seen very positively from an ESG perspective, an area that is rapidly becoming more important in our sector.”
Richard Pike, chief sales and marketing officer at Phoebus Software