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CPI: "an inflationary curveball on Wednesday could bring further pain for borrowers"

ended 18. November 2024

With inflation predicted to rise on Wednesday, mortgage rates look set to continue to edge higher this week, experts have said, with one warning that “an inflationary curveball on Wednesday could bring further pain for borrowers”.  Another said: “Nothing will push mortgage rates down this side of Christmas given that inflation is forecast to go back above target and that the impact of the October Budget has yet to be felt.” A third added: “Lenders are clearly nervous, which is why their rates have increased in recent weeks.”

9 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages
With inflation predicted to rise on Wednesday, there's every chance more lenders will continue to adjust their rates upwards this week. For anybody needing to arrange a mortgage right now, the advice is simple: don't hold your breath for any rate cuts as you may well pass out. Instead, secure something as soon as you can to ensure that you can access the best rates while they are still available.
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Andrew Montlake
Managing Director at Coreco
Lenders have been hiking their mortgage rates since before the Budget and an inflationary curveball on Wednesday could bring further pain for borrowers. If headline CPI comes in higher than expected, there's every chance rates will continue to edge up. Just a month or so ago it was looking like we would have two rate cuts before Christmas and go into the New Year on a high. That optimism has now been shattered. Anyone looking to buy needs to lock into a rate as soon as possible before they potentially edge up further.
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Mark Eaton
COO at April Mortgages
Inflation is a difficult beast to tame and it’s expected to jump back above the Bank of England’s 2% target on Wednesday. If it does, mortgage rates are likely to rise further, following a series of increases last week. Add in the impact of the government’s Budget pushing up swap rates, and a mix of domestic and global pressures, and mortgage forecasts are becoming increasingly unpredictable. Borrowers should carefully consider what their appetite for risk is when remortgaging or applying for their first loan. At a time when there is very little rate certainty, homeowners need to weigh up the pros and cons of short-term refinancing with long-term security. Too many borrowers are playing mortgage roulette by fixing for two years and gambling on rates falling. That's a risky game to play when making the largest financial decision of their lives.
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Justin Moy
Managing Director at EHF Mortgages
Nothing will push mortgage rates down this side of Christmas given that inflation is forecast to go back above target and that the impact of the October Budget has yet to be felt. As always the advice is clear to borrowers: work as early as you can on your new deal and let your broker check your current lender and the wider market to see what options you have. You can often refinance to a new lender up to six months in advance, however, some lenders have shortened their product transfer term to 3 or 4 months recently so it's always best to check with your broker on your options. Buyers should make sure they are 'paperwork-ready' when they are securing a new mortgage. They should be wary of wasting time as you may find your application misses an important deadline.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Inflation is expected to rise this week and likely above the 2% target. The fact that this has been so widely predicted will mean most lenders have already adjusted rates with this in mind and it supports the expectation of a base rate hold in December and rates staying higher for longer into 2025. There is still time to beat the stamp duty increases, so anyone looking for a new home would be unwise to delay.
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Daniel Hobbs
Managing Director at New Leaf Distribution
There's every chance mortgage rates will continue to go up if inflation doesn't play ball on Wednesday and rises back above target. If inflation comes in higher than expected, that could deliver a bitter blow to borrowers. Though the October inflation data will be a key event this week on the mortgage front, the markets are ultimately looking ahead to where they think prices will be in the future and that, following the inflationary Budget, is very much up.
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Simon Bridgland
Director at Charwin Private Clients
Don’t delay. Personally, even if a chain is not complete, I would still apply for the mortgage, get your deal locked in ASAP, as most people still opt for a fixed rate, which are only looking to go one way at the moment. If your chain takes an age to complete, you may have to re-apply later, however in the meantime you at least have a fighting chance of keeping hold of a good rate. Don't leave it until all your ducks are in a nice, neat row, as then you are sure to be paying more later on.
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Scott Jay
Managing Director at Keystones
Lenders are clearly nervous, which is why their rates have increased in recent weeks. The Budget was completely irresponsible and not forward-thinking in the slightest. However, while mortgage rates may continue to edge up ever so slightly, now is an opportunity for borrowers to snag a bargain because of the loss in confidence, as reflected in the Rightmove house price index showing new seller asking prices have fallen. So if you're paying more on your mortgage you should at least be paying less for your property. The best time to buy is always yesterday.
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Graham Cox
Director at Bridging Hub
If, and it's a big if, this week's inflation data is worse than expected, then we could see further swap rate increases, forcing lenders to raise mortgage rates. Trying to time the market is fiendishly difficult at the best of times, but given the current geopolitical volatility in the Middle East and Ukraine, the best advice I can give to would-be buyers is negotiate hard and don't overpay.