UK inflation fell to 1.7% in the year to September, the lowest rate since April 2021, boosting hopes of two interest rate cuts befoe Christmas.

Lower airfares and petrol prices were the main driver behind in the fall, the Office for National Statistics (ONS) said.

The drop in the rate was larger than expected – economists had predicted a 1.9% fall.

It also means inflation is now below the Bank of England’s 2% target, paving the way for interest rates to be cut further next month.

Financial markets have been pricing in a interest rate cut for the UK at the next Bank of England in recent weeks, but the Bank of England is facing growing pressure to also cut interest rates in December as wage growth slows.

Hopes of a double interest rate cut boost before Christmas have increased after the latest showed that wage growth slowed again.

This will be good news for home owners with a mortgage, and potentially renters if landlord mortgages rates fall. However tenants should still expect rents to rise within the next 6 months as many landlords have not yet increased rents in line with mortgage rates. In addition, added taxation, insurance rises and more regulation continue to push up costs for landlords and decrease the supply of private rentals; all of which will force rents up.

Selling? Key One Property sale fee is just 0.5%*.

Letting out? We offer highly competitive rates for letting and management. 

*Inc VAT, exc marketing package, subject to t&cs.