19/07/2023
A glimmer of hope!?🤞🏼✨ The Office of National Statistics just announced that inflation has dropped to 7.9% - better than anticipated!
There was a point when it reached a staggering 11.1%! This explains the skyrocketing prices we've been experiencing over the past year or so. 📈
The increase in inflation also led to the Bank of England raising interest rates, which meant better savings rates but also higher interest rates on loans and mortgages. 🏡😣
Lower inflation doesn't necessarily mean prices are going down. It simply means they're not rising as rapidly anymore.
We all know prices naturally increase over time. Remember when a Mars Bar was just 25p? (And twice the size!) 😅 This gradual rise is usually around 2% per year, which is what the Bank of England aims to achieve again in the future.
Once we reach that point, the general view is that savings interest rates should come back down from their current heights, mortgage rates should stabilise somewhere between the current 6-7% fixed rate and the previous 1.5-2.5%, and the prices of goods will stop skyrocketing as they have been.
We'll establish a "new normal" once again. Until, of course, the next events shake the global and UK economy, because that's just the way of the world unfortunately. But it would be nice to see a light at the end of this tunnel and some longer term security and peace of mind.
All eyes are on the swaps rates now but we’re hoping this good news on inflation will give lenders the confidence to stop their funny business with their mortgage rates. I’ll make sure to keep you all updated 😊
