Inflation Nears Bank of England Target

Twelve month inflation has today hit 2.3%, the lowest since July 2021. Whilst of course prices are still rising, this is a positive step towards seeing interest rate reductions later this year.

There had been expectations for inflation to be lower than this, with a 12 month drop of over 27% in energy prices contributing significantly to the current figure. Whilst slowing inflation is good news, we are yet to hit the Bank of England's 2% target. This means a cut to the base rate at the next meeting in June is less likely, putting eyes on August as the earliest likely opportunity for a decrease.

There is some good news now for borrowers, in that swap rates have been on a downtrend trend since April. Several big name lenders including Halifax, HSBC and Barclays have all cut various Fixed rate products in the past week, with Santander and Leeds building society also announcing reductions this week.