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UK inflation down to 8.7% but food prices still rising
The UK’s rate of inflation from the year to April was recorded by the Office for National Statistics (ONS) as 8.7%. This is a decrease from 10.1% in March, but inflation has remained higher than the 8.2% estimates from experts. Despite the decrease in the rate of inflation, food prices have increased at a rate not seen for around 45 years, which may be why inflation hasn’t decreased to the levels expected.
Short-term or long-term fixed mortgage?
A fixed-rate mortgage is a mortgage where the interest rate is fixed for a pre-determined period. The lender cannot increase or decrease the interest rate during this time regardless of what happens to the economy or the Bank of England’s base rate of interest. At the end of the fixed-rate deal, the mortgage will switch to another type of mortgage, typically a variable-rate mortgage where the interest rate can change.
Food inflation at 19.1%
Non-alcoholic beverages and food inflation was recently measured by the Office for National Statistics (ONS) at 19.1%, which is the highest we’ve seen food inflation since the summer of 1977.
Is this the last interest rate rise for now?
The UK’s base rate of interest currently sits at 4.25%, which is the highest it has been for some time. This is understandable considering the rate of inflation is x5 more than the Bank of England’s usual target of 2%.
The BoE’s interest rate decision just got more difficult
The Bank of England is deciding whether to raise the base rate again or keep it at a long-term high of 4%. But this decision isn’t going to be as straightforward as recent interest rate hikes.
