The latest figures for the UK’s inflation have been released this morning, these figures show a reduction which went further than many had predicted. Inflation is now sitting at 7.9% which is down from 8.7% last month, this has surprised many experts who thought is would fall to somewhere between 8.2% and 8.5%.
Financial markets in the UK have so far reacted positively to the news, SWAP rates have reduced by around 0.3% at the time of writing since the news broke this morning. This could also mean that the Bank of England may not need to make further large increases to the Base Rate when they meet next on 3rd August.
What does that mean for me and my mortgage?
The majority of lenders use SWAP rates to price their fixed rate mortgage products. Therefore, should these continue to fall then mortgage lenders could start to reduce the interest rate that they charge for their fixed rate products. With fixed rate mortgages currently at a 15 year high, this is a positive sign that they may start to reduce.