The Bank is England’s rate rise could become a curve ball for financial professionals who aren’t equipped with dealing with volatile economic environments.
Steven Hall, Banking Partner, KPMG said: “The rate increase will cause no real shocks to the system thanks to clear and consistent signalling by the Bank of England.
“However, in the longer term, should the rates continue to rise and with less notice, many risk managers will need to be conscious of their teams’ experience. Banks now have relatively senior professionals who built their careers during a decade long, low rate environment. Firms will want to keep a keen eye on employees providing critical functions such as analysts, forecasters and credit collections teams who have never experienced volatile rates.
“Turning to consumers, whilst progress has been made to manage levels of consumer credit, banks are bracing themselves to start dealing with a rising number of vulnerable customers. Consumers have become dependent on freely available cheap credit and as interest rates rise so will defaults. Supporting both banks’ balance sheets and vulnerable consumers through that process will be new to many workers and challenging for everyone.”