Positive News on Inflation
Bank of England Governor Andrew Bailey recently shared some good news about inflation in the UK. He said inflation is falling “faster than expected.” However, he also expressed concerns about changes in the economy that could affect prices in the future.
Bailey said, “Disinflation is happening faster than we thought, but we still have questions about whether the economy has changed in a big way.” He added that he would have predicted inflation to be higher if asked.
UK’s Performance in a Global Context
Bailey pointed out that central banks around the world are seeing positive trends in inflation. He emphasized that the UK is part of this global story. His remarks come during the annual meetings of the International Monetary Fund and the World Bank.
Market analysts are now predicting a rate cut at the Bank of England’s meeting on November 7. There’s an 89% chance that the Bank will lower interest rates by 0.25%, bringing the rate down from 5% to 4.75%.
Latest Inflation Data
Recent data shows that UK inflation unexpectedly fell to 1.7% in September. This is the lowest rate in three and a half years and is well below the Bank’s target of 2%. Prices in the services sector also eased, dropping from 5.6% to 4.9%. However, Bailey noted that some of this drop is due to changes like a significant fall in airfares.
Considerations for Rate Cuts
Earlier this month, Bailey suggested that the rate-setting committee should consider a “more aggressive” approach to cutting rates. But the next day, the Bank’s chief economist, Huw Pill, cautioned against cutting rates “too far or too fast.”
The last time the Bank changed the base rate was in August, when it was cut by 0.25% to 5%. This was the first reduction in four years.
How Much Can You Borrow?
Please note, this calculator only provides indications of possible borrowings. Contact us for a free bespoke contractor mortgage recommendation. Curious how these rate changes could affect your mortgage? Use our How Much You Can Borrow Calculator to find out. It’s quick and easy to use, giving you a clearer picture of your borrowing potential in today’s market.
Wondering how much you can borrow based on these new interest rates? Use our How Much Can I Borrow calculator! Just enter your income, expenses, and any debts to see what you might qualify for.
Your Financial Partner
As the UK’s financial landscape changes, it’s important to have expert guidance. At Contractor Mortgage Solutions, we help contractors find the best mortgage options for their needs. Contact us today to learn how we can assist you on your financial journey!
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