It was announced this week that inflation rates have finally fallen to a ‘normal’ rate of 2.3% after a long road of rising rates. This is much closer to the Bank of England’s target of 2%.

The Bank of England has held their rates at 5.25% setting this to tackle the rising inflation. With the inflation rate falling so significantly this could mean the UK could see rates coming down this year. Inflation falling typically means the mortgage rates can fall with it.

The rising wages set in April and the energy price cap which was set in April as well this has been a driving factor in falling inflation.



Financial markets predict a cut in June or August for mortgage rates with the inflation rate holding steady.

2 out of a 9 person monetary policy committee voted for a 0.25% cut in interest rates which is an improvement from just 1 vote previously. This could be a sign they are on their way to making the cut.

Economists predict that the interest rates could be cut to 4.75% or 4.5% by the end of 2024 and by the end of 2025 to 3.5%.


It’s not all positive

The forecasted inflation rate was 2.1% before the announcement this week of 2.3%. This slight difference could add concern that it is not falling as quickly as predicted and the Bank of England could see this as a reason not to cut interest rates.


Mortgage rates.

The bank of England set the base rate which is currently at 5.25% which sets the rate of borrowing money for mortgages and other loans. For first time buyers this has made it almost impossible to get onto the property market with the cost of living and high interest rates making it a challenge to save enough. In May the average 2 year fixed rate mortgage was around 4.74%.

In the first quarter of 2024, repossessions increased by 36% as people struggled to pay off their mortgage.

Those who are remortgaging this year could be in a for a lucky break if the interest rates fall in time allowing them to get a better deal.