UK inflation remained unchanged at 4% in January 2024, providing hope that interest rate cuts could come sooner than expected. While some economists predict the Bank of England will lower its 5.25% base rate as early as June, others believe rate cuts are unlikely until at least August.

Chancellor Jeremy Hunt stated that the Bank will achieve its 2% inflation target in the coming months. This has mortgage lenders and borrowers closely eyeing the next two Monetary Policy Committee (MPC) meetings on 21 March and 9 May 2024 for clues on the Bank’s next moves.

“While the recent inflation figures hold steady and hints at rate cuts gather steam, lenders will likely tread cautiously until the Bank of England provides clearer guidance,” said Sunny Budhdeo, Managing Director at Unique Property Finance “We can expect some small adjustments to product offerings and pricing, and potentially an expansion of product availability as lenders prepare for different scenarios, but borrowers shouldn’t expect lenders to make any big moves on their current product rates.”

So what does the recent inflation data mean for mortgage borrowers? Here are some potential situation:

  • Increased mortgage product diversity, but also volatility in rates as lenders react to changing forecasts.
  • Potentially lower fixed mortgage rates, though lenders may price in further cuts slowly.
  • Continued stricter affordability criteria until rate trends stabilise. This may continue even if the base rate is cut.

While inflation easing indicates rates may fall, the timing and magnitude remain uncertain until the Bank of England provides further guidance. 

We recommend borrowers get in touch with our experienced mortgage brokers who have access to a wide range of lenders and products that’ll best suit your needs. Get in touch today on 020 3645 4322 or send us an email via