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Inflation falls to 2.3% in April: "Close but no cigar"

ended 22. May 2024

The Consumer Prices Index (CPI) rose by 2.3% in the 12 months to April 2024, down from 3.2% in the 12 months to March, slightly higher than the 2.1% economists had predicted, according to official data published this morning. Newspage asked experts what this could mean for borrowers, the property market, and how lenders and the Bank of England could react. Their views are below.

19 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
To the despair of borrowers around the UK, this drop won’t be significant enough for the Monetary Policy Committee to cut rates at the next meeting. Borrowers may just have been blindsided. I’m still predicting the end of the summer for the first rate reduction, but the Bank of England will now likely err on the side of caution next month.
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Michelle Lawson
Director at Lawson Financial
Not quite as big a drop as expected but nothing is any more. It's a step in the right direction and we should take that. Another report is due before the next Bank of England annoucement, and this will be the true stick or twist moment. Twist on 20th June will be much needed for businesses, the economy and desperate borrowers.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Economists had predicted a slightly more dramatic fall in inflation and for the number to be closer to the Bank of England target of 2%. Nevertheless, this is still a significant fall that will begin to ease pressure on households and businesses. This could still be the bang from the starting gun to get the rate reduction race started and should give plenty for the Bank of England to ponder ahead of their next base rate decision.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Though welcome, this drop in inflation is behind expectations and a blow to borrowers as a result. Considering this time last year CPI inflation was 8.7%, we have come a long way. The next inflation data will come before the Bank of England make their June decision so an interest rate cut in June could still be on the cards. Everything is crossed for that first cut in June, which households so desperately need.
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Simon Bridgland
Director at Charwin Private Clients
The hopes and dreams of borrowers wishing for an imminent base rate cut have been shattered. They are now very much left to tread water whilst government policy tinkers in the engine room rather than steering the economy to safer waters. We're now somewhat lost at sea with no sign of a base rate cut on the horizon.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Though the number wasn't as low as expected, I am feeling positive as we move through 2024 that this will mean rate reductions from the Bank of England are on the way. This is exciting news for homeowners who are currently sat on tracker products waiting for cuts that will ease the burden of higher mortgage payments. Let’s hope two to three reductions happen this year as the IMF suggested yesterday.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
With all the good news surrounding the economy, it’s no wonder inflation was hotter than predicted. This signals bad news for homeowners, as it’s the excuse the central bank needed to keep rates on hold for longer. It's further evidence there won’t be a rate cut this summer.
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Craig Fish
Director at Lodestone Mortgages
Close but no cigar, is how this number can be described. A big drop but not as much as hoped or expected by the Bank of England. As a result it will likely be business as usual at the next MPC meeting resulting in a hold in base rate and misery for those with, or looking for, a mortgage. We live in hope of the next set of data.
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Rohit Kohli
Director at The Mortgage Stop
This morning's inflation data, revealing a rate of 2.3%, offers substantial evidence for the Bank of England to consider alleviating borrower strain. Although it falls short of forecasts, it approaches the Bank's target inflation rate. Coupled with the IMF's recent revised outlook suggesting room for policy manoeuvres, borrowers will be forgiven for having increased expectations for action from threadneedle street but the Banks cautious approach is more likely to prevail.
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Justin Moy
Managing Director at EHF Mortgages
A case of so near, yet so far, for mortgage borrowers, with the Bank of England now able to hide behind the higher-than-expected inflation figure to delay that important first base rate cut. This still represents an excellent step forward in the headline rate and will encourage mortgage lenders and potentially see Swap rates improve. A bittersweet print.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
This inflation data, clocking in at 2.3% instead of the anticipated 2.1%, is a bittersweet mix of relief and regret. As it came in slightly above expectations, this dims the immediate prospects of a June base rate cut by the Bank of England. However, it’s still a sign of economic stability. Disappointingly close to the coveted 2% target, this figure does foster optimism of cuts to come. We may just have to wait that bit longer.
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Scott Gallacher
Director at Rowley Turton
The fall in inflation is potentially great news for borrowers and the economy, indicating we may finally be through the worst of the Covid supply shocks. However, the Bank of England will be concerned it hasn't fallen further. The BoE will likely wait for more consistent signs of inflation nearing its target before reducing interest rates. Therefore, a June rate cut is now less likely.
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Ben Perks
Managing Director at Orchard Financial Advisers
We’re within touching distance of that godforsaken 2% barrier. It's the magical figure that stands between borrowers and better times. The Chancellor will be blowing his own trumpet with reckless disregard for what borrowers have endured along the way. The 2.3% will improve confidence and borrowers will be more buoyant about future prospects. All eyes will now turn to swap rates and if they react favourably, better rates should be on the horizon. The pressure on the Bank of England to drop the rate in June is becoming overwhelming. Everything now points toward a base rate drop. The IMF report yesterday highlighted the risks of not dropping and unemployment, insolvency and credit balance data recently have shown the people are desperate for it. It’s time: do the right thing.
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Ken James
Director at Contractor Mortgage Services
Inflation has become another barometer for the mortgage market, as inflation falls the markets seem to feel more confident that the economy is heading in the right direction. Whilst the reduction may not be as much as was forecasted it is still a positive. This we hope will filter through to the Sonia swap rates and eventually to the lenders. Buyers and sellers have been showing a very resilient front and if lenders were to react favourably with some bigger rate reductions this will help fuel the summer housing activity.
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Robert Timm
Managing Director at Sunland Mortgages
Although 2.3% isn’t as much of a fall as anticipated, inflation is still falling and there’s still hope of that all important base rate reduction in June which could breathe life into the industry
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Akhil Mair
Director at Our Mortgage Broker
We are encouraged by the latest news that the Consumer Prices Index (CPI) rose by 2.3% in the 12 months to April 2024, a significant decrease from 3.2% in March. This lower-than-expected inflation rate suggests a positive shift for borrowers and the property market.

For borrowers, the reduced inflation rate could mean more stable interest rates in the near term, potentially making mortgage repayments more manageable. This trend is favourable for the property market as it may boost buyer confidence and support sustained market activity.

Regarding the Bank of England, the lower inflation figures could influence their decision on interest rates. While economists had predicted a smaller drop, the actual decrease might still be substantial enough to sway the Bank towards considering a rate cut in June.
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Hannah Bashford
Director at Model Financial Solutions
We’re almost there! Only 0.3% off the 2% target. This is positive news as inflation is still falling, despite coming in higher than economists predicted.
We’re now so close to the target, it would be a huge blow if we didn’t see any rate cuts next month.
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Ian Hepworth
Director at Funding Solutions UK Limited
It is important to remember that falling inflation does not mean falling prices. It simply means that prices are not rising as quickly; however, where it may impact is by triggering a reduction in the bank base rate. This would impact on the cost of borrowing for both households and businesses. This could free up cash to spend on goods and could allow businesses to borrow cheaper and expand quicker.
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James Bull
Mortgage Broker at JB Mortgages
It is good news to see inflation dropping, hopefully swap rates which drive mortgage pricing will lower as a result of this. Once swap rates drop hopefully we should see some lower mortgage rates filter through.