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Inflation remains in double digits

ended 19. April 2023

Despite forecasts that it would return to single digits, inflation rose by 10.1% in the 12 months to March 2023, down from 10.4% in February. Following on from this, a handful of Qs relating to borrowers, savers, investors and the property market. Just answer the ones that are relevant to you…

  • Inflation is proving more stubborn than many predicted. How could this impact the next Bank of England interest rate decision?
  • What does today's data mean for borrowers? Another rate increase, perhaps larger than anticipated?
  • What does inflation remaining in double digits mean for the property market?
  • What does this latest inflation data mean for savers?
  • What does it mean for investors and the stock and bond markets more generally?

This story is BREAKING and the deadline is 9am. The quicker you respond, the more likely you will get published.

10 responses from the Newspage community

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Editor
Rohit Kohli
Director at The Mortgage Stop
I think this puts to bed any predictions of dramatic interest rate reductions in the short term. I think there will be a further rise in rates before the summer where I think they will be held for a few months. It's not great for the property market, in particular for the buy to let sector where stress tests still remain tight. However with lenders out there wanting to lend and competing for business there are some deals to be had for people who are ready to buy.
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Wes Wilkes
CEO at IronMarket Wealth
UK inflation may have fallen from 10.4% to 10.1% but it remains stubbornly high and means that the Bank of England will almost certainly remain steadfast in raising rates as it is their only tool to manage this. This significantly increases the risk of recession in the UK as well as tighter and more restrictive borrowing for individuals and businesses alike. The struggle, which we have been in for over three years since the pandemic, continues.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
It’s positive to see inflation coming down. The big downward move is expected in May, a year after the biggest increases to energy bills. Unfortunately this probably means that the Bank of England will pursue their impotent policy of rate increases at their next meeting, piling on pressure to homeowners and businesses alike. Inflation is still set to be back near target 2% by year end, meaning all of the rate increases this year will be reversed.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
Although inflation is particularly high at the moment, even at the lower levels it will surely return to, it will always pose a constant threat that is unwise to ignore. With inflation at an average of 2%, something that costs £1 today will cost £1.80 in 30 years. History tells us that cash savings will never keep up with inflation, but owning good companies (ie. investing in the stock market) has more than done this. This is another timely reminder of why investing in stocks makes sense.
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Jamie Lennox
Director at Dimora Mortgages
With inflation remaining in double digits and not slowing anywhere near as fast as forecast, everything is pointing to a further base rate increase in May. Although it is positive that there has been a slight reduction, it will likely be seen by the Bank of England as too soon to take the foot off the gas with base rate increases.
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Ian Hepworth
Director at Funding Solutions UK Limited
This latest inflation data is a hugely worrying statistic. March 2022 was the first full month after the invasion of Ukraine and prices spiked. Given that we are still seeing inflation at over 10% against these already inflated prices, the Monetary Policy Committee and the government are now likely to be very concerned. Further rate rises will now almost certainly certainly be on the cards, further impacting businesses and households.
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Graham Cox
Director at Bridging Hub
Despite the slower than expected drop in inflation, I think we'll continue to see monthly falls throughout this year and the inflation figure decrease quite sharply. Short-term, we could see another 0.25% base rate increase at the Bank of England Monetary Policy Committee meeting next month, which will only add to the downward pressure on house prices.
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Abigail Foster
CEO/Founder/Head of teaching at Elent Ltd
We are very likely to see another slight increase in interest rates in May, whilst great for savers as you'd hope the high street banks pass this on, but this could be worrying for mortgages.

For investors especially those early on in the investing space it may start to look more favourable to leave their money in safer savings accounts with more and more banks offering upwards of 3.5% interest. Bonds are becoming far less appealing.
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Gary Bush
Financial Adviser at MortgageShop.com
Inflation remaining in double digits is a worrying development. It seems our assessment that the last Bank of England Monetary Committee meeting on 23rd March should have seen a 50-point rise rather than the 0.25% hike we saw was correct. There is only one way to resolve this situation and it's hard-hitting decision-making. We would now like to see a 0.5% increase in rates at the next MPC meeting on 11th May to have the effect that is desired. The UK property market, like the fixed-rate mortgage market, is now starting to recover nicely from last year's debacle and the higher base rate, and with demand as it is, I expect little effect from the latest inflation figure as long as the Bank of England reacts decisively.
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Rob Gill
Managing Director at Altura Mortgage Finance
The trend is your friend and falling inflation is to be welcomed even if it's not falling quite as fast as many economists expected. Inflation looks set to fall below double figures next month, and to carry on falling throughout 2023 and beyond.