Inflation falling means the peak in interest rates is in sight – homeowners can breathe a sigh of relief 🖊️ HamishMcRae5 via ipaperviews
At last some, with the Consumer Price Index in June up “only” 7.9 per cent on a year earlier. It was a surprise, for the financial markets had expected it to be around 8.2 per cent, and it was way down from the 8.7 per cent increase in May.
The immediate reaction on the markets was to cut the yield on gilts , and if the Government can borrow more cheaply that cuts the borrowing costs for everyone else – and especially. So the two-year gilt yield, over 5.2 per cent on Monday, is now down to 4.8 per cent, with the five-year rate down from 4.6 per cent to 4.25 per cent.
It will take a few days for these declines to feed through into mortgage rates, which will naturally be a bit higher than gilt yields, but for all borrowers, this is clearly very good news. It means that the peak in
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