Will today's wages data mean a pause in fixed-price mortgage reductions

I don't think that wage data will have any effect on fixed-rate pricing. It has become increasingly apparent that many lenders are falling well short of their lending targets and the perceived rate war has begun as they all jostle for market share. NatWest today, are the most recent to further reduce their fixed rate pricing and I don't think this will be the last of it.

Given that a few lenders, including NatWest, announced they are reducing selected rates today, the wage data alone might not trigger a rate hike. However, If tomorrows inflation figures don't meet expectations, it could undo the recent rate rollbacks.

Tomorrow's announced Inflation figures will be a key barometer for what happens next, and will not be a direct consequence of Wage data figures recently announced. That said, 2yr and 5yr SWAP rates have climbed today to figures last seen back on 18th July 2023, which could be as a consequence of wage increase data. Lenders will have priced for at least a further 0.25% Base rate Increase, however, September inflation figures will soon be upon us, let alone announcements for August, and as I keep reiterating until we see a consistent downward curve of inflation figures will we see a consistent lowering of SWAP rates and in turn lenders lowering fixed rates. August loan books for lenders, historical slower periods of NEW lending, and previous months' targets not being achieved, this may not as yet be a trend of lowering rates, and more of a flash sale of mortgages

Todays data was mixed and should really have an effect on mortgage pricing. Tomorrows inflation data is much more important and will shift the dial on whether markets think the Bank of England will pause or increase rate hikes, anything could happen. Inflation is likely to fall away sharply, and the central bank should then pause with the rate rises, but this governor is unpredictable and likes to act severely to quell inflation, so the inflation reduction needs to be over a percentage point to halt further rate increases.

Although pay went up more than expected today, unemployment also rose to balance out the inflationary impact.

I am not sure the wage data released today is drastic enough to upset the current markets on fixed rates and the ongoing price war. Another base rate rise is expected in any case, to hopefully then reach the peak. Whilst wages have increased, they have still done so less than inflation, there-by no-one is suddenly feeling better off or flush with disposable income. There will be no mad spending sprees. So unless the Bank of England does something unwarranted and knee-jerk, which admittedly is their usual policy, fixed rates should continue to fall and stabilise. Of course, Wednesday's inflation data will have far more impact on the economic outlook for the country over the coming months.

Following todays inflation data, lenders are now more likely to hold rates steady, whilst at the next MPC meeting we are likely to see an increase in the base rate of 0.5%. Lenders may follow suit, and reverse the declines we have recently experienced.