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Inflation rises to 2.6% - property and mortgage market and base rate

ended 18. December 2024

The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to November 2024, up from 2.3% in the 12 months to October. Newspage asked experts how this could impact the mortgage and property markets, and the base rate. Their views are below.

7 responses from the Newspage community

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Iain Swatton
Director at Exemplar Financial Services
The rise in CPI to 2.6%—up from 2.3% in October—is a stark reminder that inflationary pressures are far from over. For the mortgage market, this is unwelcome news. A base rate cut this week now seems off the table, and we may not see movement until spring 2025. Borrowers hoping for relief face further uncertainty. The government, no doubt hoping for some festive goodwill to offset the economic fallout from their Budget, won’t find much cheer in these figures. This inflation uptick puts additional strain on households and adds pressure to an already fragile housing market.
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Rohit Kohli
Director at The Mortgage Stop
November’s inflation rise to 2.6%, up from 2.3% in October, is a stark reminder that the battle against rising prices is far from over. Any hopes of an early 2025 interest rate cut now seem dashed, with the Bank of England likely to hold firm well into the spring. For households, the festive season offers little cheer. Rising costs and persistently high borrowing rates will tighten belts further, while businesses face tough choices amid a stagnant economy and rising costs. As poor growth continues to haunt the UK, the outlook feels decidedly Dickensian. Like Scrooge before his transformation, policymakers remain focused on curbing inflation, leaving many to endure another winter of financial hardship.
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Ben Perks
Managing Director at Orchard Financial Advisers
Our inflation rate is so precarious. Is it time to scrap the 2% target and use something more realistic and in tune with modern life. A 0.3% increase means that the Bank of England are very unlikely to make any cuts to base rate in the near future, but away from the data borrowers and households are desperate for it. Insolvencies rising as revealed yesterday shows just how desperate.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
So long to that base rate cut this week. In fact, we may now need to wait some time before households get the rate cut they so desperately need. This is not the news the country wanted to see as it heads into Christmas.
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David Stirling
Independent Financial Adviser at Mint Wealth
Our economy is in a tailspin and these inflation figures compound other data released this with a massive increase in insolvencies and average earnings up. With inflation running so high Threadneedle Street have no option but to cut the BoE base rate tomorrow. With the October Budget yet to bite properly in 2025, Rachel Reeves may need to look at bit closer at the long-term outcome of her decisions. Sadly, it doesn't look like there is any Christmas cheer for borrowers, with springtime now looking more obvious for rate cuts given the news this week.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The recent rise in inflation to 2.6% is undoubtedly raising eyebrows across the property and mortgage sectors. While a modest increase, it signals growing pressure on household budgets and sparks questions about potential movements in the base rate. For borrowers, this could mean tighter affordability checks and a renewed urgency to secure fixed-rate deals before further adjustments.

From a property market perspective, inflation often nudges interest rates upwards, which can dampen buyer confidence—particularly among first-time buyers navigating affordability challenges. However, it’s not all doom and gloom; we could see savvy investors seizing opportunities in a potentially cooling market.

As brokers, our role is to guide clients through the uncertainty by providing clear advice and ensuring they’re prepared for potential rate hikes. Inflation may create challenges, but with the right approach, it also opens the door to strategic planning and informed decision-making.

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Graham Cox
Director at Bridging Hub
Just when inflation appeared to be back in its box, it rears its ugly head again. A 0.3% jump in CPI to 2.6% has surely killed any hopes of a base rate cut this week. Most of the increase was higher transport and household costs, and the hope must be that these are only temporary. Teetering on the brink of recession, the UK desperately needs lower interest rates to kickstart the economy.