1 week Ago By [email protected] (Holly Fleet, Tom Kershaw)
The live ITV breakfast programme Good Morning Britain grinded to a halt on Wednesday morning for breaking news. GMB show host Charlotte Hawkins reported that the inflation rate has decelerated to a 1.7 percent increase in September, falling below the Bank of England's target of 2 percent for the first time in almost three years.
She then handed over to her colleague Jonathan Swain, who was reporting live from Penge and discussed this "good news" He explained: "It doesn't mean things are getting cheaper. It means prices are not rising as fast as they once were. I'll take you back to October 2022 when inflation was at 11 percent, and that rate has now dropped to 1.
7 percent." He added, "Normally, when inflation rates come down, you expect mortgage rates to come down as well. However, that is not necessarily the case.
" The September figure is typically used to determine the increase in many benefits, such as Universal Credit, for the following April. This adjustment also affects major disability benefits including personal independence payment, attendance allowance, disability living allowance, and carer's allowance. READ MORE Amanda Owen's TV transformation as Yorkshire Farm fans amazed amid return The Office for National Statistics has indicated that motor fuels and lubricant prices have seen a significant decrease, with a drop of 10.
4% in September compared to the same month last year. Additionally, air travel costs contributed to the lower inflation rate, with reduced airfares linked to post-summer discounts. However, there has been an uptick in food and non-alcoholic drink inflation, with notable price rises for milk, cheese, eggs, and fruit impacting households, reports the Express .
Darren Jones, Chief Secretary to the Treasury, commented on the slowdown in price increases, stating it "will be welcome news for millions of families". "However, there is still more to do to protect working people, which is why we are focused on bringing back growth and restoring economic stability to deliver on the promise of change," he added. Encouragingly, core inflation has also seen a decline – though it remains higher than the headline CPI index.
The Core CPI rate, which omits volatile items such as energy, food, alcohol, and tobacco, was at 3.2% for the year to September, a drop from 3.6% the previous month.
Goods prices experienced a sharper decrease, with a descent to -1.4% last month from -0.9% in August.
Meanwhile, services inflation – having risen over the summer partially due to the "Taylor Swift" effect and influenced in part by wages – has also moderated from 5.6% to 4.9%.
These various factors seem to indicate that an interest rate cut could be forthcoming in November, with expectations in some quarters of a reduction by 0.25 percentage points, and further cuts in December not out of the question. Amy Knight, personal finance expert at NerdWallet UK, commented: "The difference between a 0.
25 and 0.5% drop could have a significant bearing on monthly repayments for new and existing mortgages." "Borrowers who've been feeling the squeeze from high rates can anticipate seeing a little more of their income, lightening the load on family finances.
For those stepping onto the property ladder for the first time, a decrease in rates could ease the challenge of passing lenders' affordability tests, especially if their credit history is in good shape," she said..
