The Current Account: The Latest Headlines From Across The Banking Sector - January

2024-01-15 |  Chirag Soree

Welcome to the first edition of The Current Account for 2024! This month's headlines explore the possibility of a recession in the UK in 2024 and Consumer Duty.

As we head into 2024 the macro-economic picture for the year ahead is on everyone’s minds. Will the UK head into recession this year?

PEN Point of View:

Having narrowly avoided the recession economists predicted for the UK in 2023, we now turn our attention to 2024. Initial signals at the end of the past year were encouraging, with inflation lowering, interest rates levelling off, and the macro-economic situation globally looking more positive. However, the Bank of England is expected to take its time bringing rates down, in order to safeguard the improvements seen in getting inflation closer to its target, meaning the pain felt by UK mortgage holders and borrowers will not taper off too soon. In the meantime UK growth is predicted to be incredibly slight, keeping the UK out of recession – but only just. Any headwind from the wider economic and geopolitical world could knock this progress off course – and given the impact the war in Ukraine had on UK inflation rates, its worth keeping our finger on the pulse of the geopolitical tensions in the Red Sea and other areas.

The past year was largely dominated around discussions of Consumer Duty – as we move into 2024 what has the industry learnt?

PEN Point of View:

As we move into the new year the dust is beginning to settle following the implementation of consumer duty. Many firms are trying to anticipate what the reaction of the regulator will be both industry-wide and to specific firms. What is becoming clear however is that the FCA is taking it extremely seriously, with signs of a crack down already beginning to show as they start requesting evidence to ensure firms have understood the rules and complied with them. Most firms will have the annual board report at the front of their minds as the deadline for completion of this is 31st July, with the FCA using it as the first opportunity to assess how firms have complied with the legislation. Whilst it’s healthy to try and anticipate the potential risks of not being deemed to have aligned to the requirements correctly, there are also opportunities presented in the consumer duty landscape, which savvy firms are beginning to capitalise on for wider benefits.

Thanks for reading the latest edition of The Current Account. If you're interested in hearing more about any of the topics discussed here, feel free to connect with me on LinkedIn or contact me via our website.

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