Inflation dropping less than anticipated will relieve pressure on mortgage holders, according to financial analyst Martin Lewis.
This morning, the Office for National Statistics verified that in the year ending in June, the inflation rate dropped to 7.9%.
In comparison to May’s 8.7%, this represents a larger decline than anticipated. Most experts had anticipated a result of 8.2% for this month.
Crude core inflation, which increased mortgage rates, was 7.1% and was predicted to remain there, according to Mr. Lewis. It now stands at 6.9%.
‘This takes a little pressure off the Bank of England and hopefully the money markers, there’s a chance (no promises) new mortgage fix rates may ease off a touch.’
The new rate is the lowest reading since March 2022, indicating price rises may finally begin to be slowing down.
But everyday spending will not see much relief.
Speaking on Good Morning Britain, Mr Lewis said: ‘For the first time in a long time we are seeing better than expected inflation figures.
‘In terms of the amount in your pocket it isn’t going to be make that much difference.
‘But some of the pressure will be relieved from borrowers.’
ONS chief economist Grant Fitzner said after the announcement: ‘Inflation slowed substantially to its lowest annual rate since March 2022, driven by price drops for motor fuels.
‘Meanwhile, core inflation also fell back after hitting a 30-year high in May. Food price inflation eased slightly this month, although it remains at very high levels.
‘Although costs facing manufacturers remain elevated, especially for construction materials and food items, the pace of growth has fallen across the last year, with the overall cost of raw materials falling for the first time since late 2020.’
But experts have warned the nation is ‘far from being out of the woods’ amid the cost of living crisis.
Adam Bullock, UK director at TopCashback warned that for millions of people, the cost of living is ‘still a crisis’.
‘Inflation may have dropped but with a year-on-year increase of 7.9%, we are far from being out of the woods,’ he added.
‘The dipped average figure, while better than a rise, must not mask the soaring prices we are still seeing every day.
‘Recent ONS figures revealed food and soft drink costs were up 18.4% year-on-year, while the price of flights soared by 20% and the cost of things like live music tickets, toys and package holidays have climbed by nearly 7% year-on-year.
‘These hikes will be a big blow for families in the coming months.’