Katie goes into business with Perdita Hyde-Sinclair (Georgia Slowe) and develops feelings for Perdita's husband, Grayson Sinclair (Christopher Villiers). Grayson's mother, Rosemary King (Linda Thorson), is delighted and encourages Katie, hoping for grandchildren as Perdita can't have children. Katie offers to be a surrogate mother for Perdita but regrets it when she realises how unstable Grayson and Perdita's marriage is. However, Katie gets pregnant but threatens to have an abortion when Perdita leaves Grayson for Sadie's ex-lover and their brother-in-law Matthew (Matt Healy). Katie stays with Grayson and their relationship becomes more intimate. When Perdita finds out, she attacks Katie and fears that she has caused Katie to miscarry and she gets medical help. Perdita then tells Katie that Grayson is bisexual and had had an affair with Paul Lambert (Mathew Bose) causing Katie to doubt her relationship. When Katie learns that Grayson has been supporting Perdita and lying to her, she cons money from him. Katie gives birth to a baby boy in the back of Matthew's car and after signing parental rights over to Perdita, she gives Perdita the money she had conned from Grayson, in order to start a new life in London. Grayson is enraged when he finds out and holds Katie at gunpoint, demanding Katie tell him where Perdita is. Katie refuses to tell him, even when Grayson ends up taking Matthew and his brothers hostage; Grayson ends up shooting Matthew's youngster brother Carl (Tom Lister), but their older brother Jimmy (Nick Miles) helps Matthew overpower Grayson - who is consequently arrested.