What you need to know this week
- Bank of England reduced interest rates from 4.25% to 4% after a narrow MPC vote; inflation at 3.6% remains a concern.
- Ofwat CEO resigned; Chris Walters appointed Interim CEO, Helen Campbell appointed Executive Director, Delivery.
- Updated sector briefing on AI Voice Agents in debt collections released; FCA AI Lab continues work on AI governance and bias.
- Money Advice Hub launched Gracie-A, a human-in-the-loop AI assistant for debt advisers.
- FCA published feedback on the Future Entity for UK open banking; entity will set API standards and monitor compliance.
- PayPlan outlined key changes to the 2025 IVA Protocol, including exclusion of the family home in certain cases.
- FOS received 68,000 new complaints in Q1 2025/26; 31% uphold rate; motor finance most complained about.
- Credit Information Market Study work to improve reporting of defaults, forbearance, token payments, and debt solutions.
- Revised Insolvency Code of Ethics and updated Insolvency Guidance Paper to take effect 1 October 2025.
- Scottish statutory debt solutions saw a 5.8% decrease in personal insolvencies in Q1 2025/26; PTDs down 11.3%.
- Registry Trust reported 245,928 new consumer judgments in Q2 2025, up 26.2% year-on-year.
- Multiple collaborations announced: Plain Numbers with MaPS, PayPlan with MorganAsh MARS platform.
Key Themes
Monetary Policy and Economic Context – link
The Bank of England reduced interest rates to 4% following a 5–4 MPC vote, citing ongoing inflationary pressures. Inflation stood at 3.6% in the year to June 2025, driven by food and fuel prices. For financial services and debt collection professionals, rate cuts may affect repayment affordability, mortgage demand, and arrears levels.
Regulatory Leadership Changes at Ofwat – link
Chris Walters appointed Interim CEO, with Helen Campbell taking on Executive Director, Delivery. Their focus will be on delivering a £104 billion programme, stabilising Thames Water, and progressing major projects. This leadership transition is relevant to creditors and suppliers dealing with regulated utility sectors.
AI in Debt Collections – link, link, link, link
Updated sector analysis highlights governance and non-functional requirements for AI Voice Agents. FCA AI Lab’s pilot on NLP bias underscores the need for ethical and accurate AI deployments. The launch of Gracie-A by Money Advice Hub introduces a monitored, adaptive support tool, showing AI’s integration into regulated debt advice operations.
Future Entity for UK Open Banking – link, link
The FCA outlined the Future Entity’s remit to set API standards, monitor performance, and ensure interoperability. This will influence credit decisioning, lending innovation, and customer data sharing practices.
Debt Remedies and Protocol Updates – link
PayPlan detailed the 2025 IVA Protocol changes, clarifying suitability criteria and responsibilities for Insolvency Practitioners. This strengthens consumer protections and shapes adviser guidance, directly impacting regulated advice pathways.
FOS Complaints Data – link
Q1 2025/26 saw 68,000 new complaints, down year-on-year, with 31% upheld. Motor finance remains the most complained-about product. For credit management, this signals persistent customer dissatisfaction in vehicle finance and associated regulatory scrutiny.
Credit Reporting Standards – link, link, link, link
CRGB’s focus on improving data for defaults, forbearance, and debt solutions addresses a common pain point for consumers and advisers—credit file impacts. This is critical for compliance under PS24/3 and consumer trust in financial products.
Insolvency Code of Ethics and IGP Update – link
The updated Code aligns UK practice with international standards, enhancing professional behaviour, role definition, and complaint handling—key for maintaining integrity in insolvency work.
Scottish Debt Solutions Trends – link
Q1 2025/26 saw a decline in personal insolvencies and PTDs, while DPP approvals slightly increased. Average debts and disposable income levels offer benchmarks for DMP sustainability in England & Wales.
Consumer Judgment Data – link
Registry Trust reported strong growth in consumer judgments, with 38% of unsatisfied cases below £500. Understanding judgment value distribution aids in assessing enforcement trends and credit risk exposure.
Collaborations – link, link
Partnerships include Plain Numbers with MaPS to improve public financial comprehension, and PayPlan with MorganAsh to strengthen vulnerability management, both relevant to customer engagement and compliance outcomes.
Sector Events – link, link, link
Notable dates include: MALG North East Forum (9 Sep, virtual), CSA UKCCC Conference (11 Sep), FourNet Compliance Event (17 Sep, Manchester), Missing Out 2025 (24 Sep).
Key Statistics
- Bank of England reduced interest rates by 0.25% to 4%.
- UK inflation at 3.6% year-on-year to June 2025.
- FOS Q1 2025/26 complaints: 68,000 new cases, 31% upheld.
- Motor finance commission complaints: 21,500 new cases, down from 36,000.
- Scottish personal insolvencies: 1,935 (down 5.8% YoY).
- Scottish PTDs: 1,196 (down 11.3% YoY).
- DPP approvals: 1,400 (up 1.7% YoY).
- Registry Trust Q2 2025 consumer judgments: 245,928 (up 26.2% YoY).
- 4.1m unsatisfied consumer judgments in England & Wales; 38% under £500, 13% over £3,000.
- £5.1 billion owed in unsatisfied consumer judgments over £3,000.
Newsletter Contents
- Bank of England interest rate cut and inflation update.
- Ofwat leadership changes and strategic delivery priorities.
- Sector analysis on AI Voice Agents in collections.
- Launch of Money Advice Hub’s Gracie-A AI assistant.
- FCA Future Entity for UK open banking.
- PayPlan summary of 2025 IVA Protocol changes.
- MaPS blog on mis-sold car finance.
- FOS quarterly complaints data for Q1 2025/26.
- CRGB credit reporting improvement initiatives.
- Revised Insolvency Code of Ethics and IGP update.
- Scottish statutory debt solution statistics Q1 2025/26.
- Registry Trust Q2 2025 consumer judgment data.
Find the full DEMSA newsletter, commentary and links here
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