Photo by Inflation has reared its head once again, and the Bank of England is now unlikely to cut interest rates next month. According to the latest figures, consumer price inflation has risen to 2.2%, back above the Bank of England’s 2.0% target. While core inflation has fallen to 3.3% from 3.5%, and services inflation has eased to 5.2% from 5.7%, the overall picture is one of rising inflation.
The impact of this on the mortgage market is likely to be significant. Richard Pike of the lending company Pheobus warns that “mortgage borrowers on tracker rates are likely to have to wait for the next cut in their monthly payments.” This could be a significant blow to those who were hoping for a rate cut, and may leave them feeling stretched to breaking point.
However, for those looking for a new fixed rate or with a remortgage looming, the news is more positive. Mortgage rates have eased in recent weeks, with the average two-year fixed rate mortgage now at 5.67%, down from a recent high of 5.97% at the end of June.
Leaders Romans Group, one of the UK’s biggest agency groups, has unveiled redesigned estate agency boards to promote its carbon-neutral status. The boards are made from fully recyclable materials, and the redesign is part of LRG’s broader sustainability efforts. The group has achieved carbon-neutral status for two consecutive years, eight years ahead of a 2030 target.
In collaboration with supplier Kremer Signs, the boards are designed to provide the same high-quality signage while significantly reducing environmental impact. This move is seen as a positive step towards a more sustainable future, and is part of a growing trend in the industry towards eco-friendly practices.
Kiersty Sims, marketing director at LRG, comments: “As part of our commitment to sustainability and brand cohesion, we have redesigned our agency boards to give our brands a fresh, more unified look. By standardising their proportions, we’re enhancing brand consistency across the group. Additionally, we’re proud to use recycled and recyclable materials in our new boards, underscoring our dedication to sustainable practices.”
In a related development, the Bank of England’s August Monetary Policy Report predicted a slight uplift in inflation, and advised a cautious approach to further rate cuts. With rising inflation, it will be a surprise if the Bank of England doesn’t stick at 5% come September.
Mortgage Market
However, despite these concerns, experts believe that the impact of the inflation hike on the mortgage market will be limited. Ranald Mitchell, director at Charwin Mortgages, comments: “While an interest rate cut in September may be less likely, lender competition with mortgage rates should support borrower demand and maintain resilience in the property market.”
Ben Perks, managing director at Orchard Financial Advisers, adds: “A base rate reduction in September was always unlikely, but now seems totally out the window. It is unnerving to see inflation on the rise again, but an uptick to 2.2% is better than anticipated. No need for panic stations yet. This data should have very little impact on swap rates and the interest rates available to borrowers should continue to trickle downwards.”
Riz Malik, director at R3 Mortgages, warns: “While no one expected inflation to stay at 2%, the current data doesn’t point to a rate cut at the September meeting. With no meeting in October, November could still present an opportunity for the second base rate cut of the year.”
Inflation
In summary, the latest inflation figures have cast a shadow over the mortgage market, making a rate cut next month unlikely. However, despite this, mortgage rates have eased in recent weeks, and experts believe that lender competition will support borrower demand and maintain resilience in the property market.
Mortgage Rates
One silver lining is that the UK’s biggest agency group, Leaders Romans Group, has unveiled redesigned estate agency boards to promote its carbon-neutral status. The boards are made from fully recyclable materials, and the redesign is part of LRG’s broader sustainability efforts.
Eco Friendly
While the inflation hike may have dashed hopes of a rate cut, the mortgage market is expected to remain resilient. With lender competition supporting borrower demand, the impact of the inflation hike is expected to be limited. And with the UK’s biggest agency group leading the charge towards a more sustainable future, there is hope that the industry will continue to evolve and improve.
As we look to the future, it’s clear that the mortgage market will continue to face challenges. But with experts predicting that lender competition will support borrower demand, and the industry moving towards more sustainable practices, there is reason to be optimistic.
Future
