Copy article

'Secure mortgage rates now, don’t wait' expert warns ahead of latest inflation data

ended 13. January 2025

The latest inflation data is set to be released this week, with markets bracing for its potential impact on swaps and mortgage pricing. Persistent volatility in the bond market, driven by an uncertain economic outlook for 2025 both domestically and internationally, has already led to swap rates edging upward. Experts warn that any unexpected rise in inflation could further push mortgage pricing higher as lenders adjust to reflect the increased risk.

Meanwhile, Frances Haque, Chief Economist at Santander UK, has said that lenders may "nudge up pricing" in response to rising swaps and persistent inflation. Haque predicts four cuts over the year, with the base rate ending at 3.75% and stabilising between 3–4% in the long term. Below, industry experts weigh in on the potential outcomes for mortgage pricing in the weeks ahead.

6 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Aaron Strutt
Product and Communications Director at Trinity Financial
Even though there have not been any major fixed rate price hikes over the past few days, it seems likely we will be in for another bumpy period with increases expected soon. Once one or two of the big lenders change their rates, more will follow. If your mortgage is coming up for renewal soon or you are holding off taking a fixed deal, it makes sense to secure the rate now rather than wait to see what happens.
Copy

Editor
Ben Perks
Managing Director at Orchard Financial Advisers
It’s a big week. We await the never-so-closely watched inflation figures with trepidation as the Monetary Policy Committee seems totally led by these. If, as expected, there is an increase we will see swaps rise and mortgage interest rates follow suit. The Bank of England has the ability to change the course of rates in February, but they will be reluctant to stick their heads above the parapet.
Copy

Editor
Louis Mason
Content and Communications Director at Oportfolio Mortgages
Inflation data this week will be critical for market sentiment. An upside surprise could push swap rates and mortgage pricing higher as lenders price in risk. I agree with Frances Haque's assessment—current bond market volatility and inflation persistence may prompt lenders to adjust rates upward in the short term. However, if the MPC proceeds cautiously, as expected, we could see rates stabilise later in the year, aligning with her forecast of gradual base rate cuts. All I can say for definite is that everyone in the industry should be following UK inflation trends like a hawk. And if you aren't, then you aren't doing the necessary research that your clients need.
Copy

Editor
Daniel Hobbs
CEO at New Leaf Distribution
After a torrid week in the bond markets last week, all eyes are now on Wednesday's inflation data and how that could impact mortgage pricing. If the data is wrose than the markets are expecting, mortgage rates could once again be headed north to the dismay of borrowers.
Copy

Kim McGinley
Director & Specialist Broker at VIBE Finance
Mortgage rates and inflation are two terms we’d all rather avoid. With this week’s inflation data looming, the big question is: could we see a jump in swap rates, and will lenders respond by pushing mortgage prices up? Last week’s bond market volatility already rattled things, and if inflation doesn’t behave, we could be looking at short-term rate increases. That said, I’m clinging to the hope that things will steady before February, although that's perhaps wishful thinking. Let’s face it – mortgage pricing right now is a balancing act. Lenders are trying to juggle inflation, competition and demand all at once. It feels like we’re bracing for another rate spike, but there’s still hope some stability could be on the cards soon.
Copy

Peter tester
Tester at Yolk interactive
I