The reduction of the interest rate could be put on hold, because inflation in April in April rose to 3.5% to 3.6% in March.
The strong increase in the costs of goods and services during the year has been attributed to the price increases in April when households an increase in the municipal tax, energy and water accounts, broadband and saws stamp right.
Now it will probably have an impact on mortgage interest rate, since higher inflation will make the Bank of England reluctant to lower the interest rates next month. It will also affect exchange rates that lenders use to determine their prices.
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn PartnersSaid: “Hypotheken homeowners and first buyers can be discouraged by the last inflation lecture, because it increases the risk that the pace of interest rate letings there can delay.
“The next rate reduction in June will be based on countless factors and the British about inflation photo coincides with a time when the economy is expected to slow down.”
The target interest rate of the Bank of England for inflation is 2% and to maintain it at this level, the interest rates must be high.
According to experts, the Bank of England had previously predicted that inflation would peak at 3.7% in the summer before he returned to the target of 2%.
The rise of today’s inflation was expected because of the ‘terrible April’ price increases. Yet it will still come as a blow to households, especially those who have mortgages and hoped for more price reductions.
Justin Moy, director of EHF HypothekenSpeaking through a newspaper agency, thinks the mortgage interest will rise. He said: “This would always be the month with a considerable jump, whereby the inflation figure including a multitude of tax increases from April.
“This increase will certainly block the recent Improvements of mortgage interestAnd with the inflation that remains above 3% for the rest of the year, it can be too much to expect further basic rate reductions in 2025. And that is why the mortgage interest rate will go up in the coming weeks. “