Inflation jumped to its highest level since January 2024 in the 12 months to April, according to the Office for National Statistics, with steeper household bills behind the increase.
Inflation, as measured by the Consumer Prices Index (CPI), rose to 3.5% in the 12 months to April, the ONS said, up from 2.6% in March. Living costs, including council tax, energy and water bills, increased in April, helping push inflation higher, with rising transport costs also contributing.
The increase was higher than economists had expected, with many predicting that it would rise to 3.3% rather than 3.5%.
Prior to this week’s inflation announcement, it was thought that the base rate, currently 4.25%, may continue to reduce in coming months. However, with inflation pressures mounting, some are predicting that the base rate may now remain at this level for a while longer.
Although many lenders have reduced their fixed rates in recent weeks, some have started to increase them, and swap rates, which lenders use to determine their fixed rate pricing, have ticked up over the past fortnight.
However, there are still plenty of competitive deals available for those who might want the peace of mind that their monthly payments won’t change even if interest rates do stay higher for longer. Mortgage rates are changing frequently regularly though, so if you spot a deal you like, you might not want to hang around, as there’s an increased risk that lenders could withdraw deals with little or no notice if they’re struggling to maintain their current pricing.
The good news is you can usually secure your next mortgage deal between three and six months in advance, and if you’re worried about locking into a fix at the wrong time, our free Rate Check service can provide valuable peace of mind. The service enables you to sign up to a deal now, protecting you against any future potential increases, but allows you to review rates at anytime until you make the final switch.
