The Office of National Statistics has said that, since the start of the year, inflation has risen to 3 per cent—the highest annual rate since March 2012. This makes a UK interest rate rise from the Bank of England highly likely.
Matthew Brittain, an investment analyst at Sanlam UK, states: “Today’s announcement makes a UK interest rate rise in November a near certainty as the Monetary Policy Committee takes action to show they are keeping inflation under control.”
He predicts that inflation will fall back to around 2 percent in the coming months, though this view is “not necessarily shared by the Bank of England”.
If you are currently on a variable mortgage rate, you will be impacted by these changes as soon as they take effect, so you should ensure you have a buffer in place in order to cope with repayment increases.
Now may be a good time to consider remortgaging for a fixed deal (or choosing a fixed deal if you are going to be buying a property soon) as fixed mortgage rates are currently the cheapest they have ever been.
If you are already on a fixed rate, you won’t be affected until the end of your fixed rate term. If you are near the end of your fixed period, it may be worth considering remortgaging; despite early repayment charges, you may still save more money in the future by securing a low fixed rate now.
For mortgage advice, call 0345 873 1234 or contact info@specialistmortgages.uk.com.