Liz Martins, UK economist at HSBC UK, said there were “reasons to be more cheerful” about the UK economy as she continued to predict the Bank of England base rate would fall to 3% by the end of 2026.
Speaking at Stonebridge's annual conference, she said: “There is a path for things to get better from here. It is a narrow path. There are plenty of pitfalls and risks along the way but there are reasons to be more cheerful for this year.
“The first is lower inflation. Our forecast is that we’ll be back down to 2.1% by April. We’ll briefly dip below the Bank of England’s target in the summer. We’ll be back around that more normal 2% level and I think all of us will really benefit from that because, as households, we all feel the impact [and] as businesses it’s a problem.
“It’s a problem for Rachel Reeves as well because it keeps interest rates and Gilt yields higher. Lower inflation will help everybody I think.”
Martins went on to say that, despite ongoing concerns over unemployment figures, wages have been rising more than inflation and interest rate cuts will help unlock that money so it can be spent in the economy. She also pointed out that the Chancellor built herself a bigger cushion in the last Budget, so 2026 should be a quieter year for fiscal policy, while business confidence is on the rise.
Guest speakers at the conference included Dame Kelly Holmes alongside mortgage and protection experts and sector leaders such as Lloyds Banking Group's managing director for intermediaries, Esther Dijkstra, Santander UK’s head of homes, David Morris, and Stephanie Charman, chief executive of the AMI.
The network’s financial update reported that Stonebridge ARs completed 24.3% more mortgages last year, running ahead of the network’s 11.3% growth in adviser numbers.
Rob Clifford, chief executive at Stonebridge, said: “It was a wonderful day and there was so much energy in the room. Dame Kelly was an inspiration and, with so much to celebrate at the network, the sense of self-belief and pride was palpable.
“I always enjoy seeing our members interact with each other because it’s the one time in the calendar where they really get to see how they’re part of something bigger. They see the culture they build with us reflected in advisers they’ve never met before, but will go on to build lasting relationships with.
“This is all being captured in the sector-leading growth we’re delivering, both in lending figures and adviser numbers. The day itself is never just a meet-and-greet, although it’s always superb fun. We send all our advisers away with a deeper understanding of the opportunities and challenges in front of them, and a lot of what happens on the day shapes how we amend our services over the next 12 months. It’s incredibly valuable all round.”
