Inflation Declines but Relief for Homeowners Might Not Be Felt for Years

Homeowners were facing higher interest rates if inflation did not respond to the efforts by the Bank of England’s Monetary Policy Committee (MPC). In the start of 2023, the inflation rate was double digits, a bit over 10%, having come down from the peak of 11.1% reported in October 2022. The MPC had been fighting to tame inflation since December 2021, and when the peak hit in October 2022, many homeowners were sitting safe in their historically low two-year fixed rate and shielded from rate hikes. Come 2023 and mortgage terms ended leaving homeowners with a choice from much higher interest rates. The same will occur in the year ahead.