The latest forecast report on inflation came from the Office of National Statistics (ONS) and revealed the fall of petrol costs has stalled expected growth in the month of August. The expectation was for inflation to grow to 10.2% which would be an increase over July’s level of 10.1%, however it was reported at 9.9% annually. This news should come as a bit of relief to those concerned about the Bank of England’s Monetary Policy Committee (MPC) perhaps pushing the standard base rate up by a significant increase.

The last six consecutive meetings of the MPC have resulted in a base rate increase. Last December, the increase took the rate from the historic low of 0.1% to 0.25%. Until last month, all increases this year had been at 0.25%. Due to the rapid growth of inflation and forecasts of it reaching 13.3% by the end of the year, the MPC hiked the base rate by 0.50% in August. The increase took the Bank’s rate to 1.75%.

The ONS reported, “A fall in the price of motor fuels made the largest downward contribution to the change in both the CPIH and CPI annual inflation rates between July and August 2022.”

The MPC postponed their September meeting until next Thursday due to the passing of Queen Elizabeth II. 

There had been strong warnings of the MPC choosing to increase the rate by 0.75% at the September meeting. There is not a scheduled meeting for October, so the next meeting will be in November. Due to both the lack of another meeting next month, and the forecasts of inflation growth, an aggressive hike move was expected. 

Whether the MPC increases the rate by the same level of 0.50% as last month or takes stronger action against inflation with the expected rate hike of 0.75%, the base rate will be above 2.0%.

In reflection, the rate will be above 2.0% in less than a year after having been at an all-time 300 plus years historic low of 0.1%. 

Homeowners that are due to soon have their mortgage term end or have already had their term end will be facing vastly different and more expensive rates than they were used to paying. Experts are encouraging homeowners to shop for a remortgage to avoid paying more than necessary.

Without a remortgage, when the homeowner’s term ends, they will be moved to the lender’s standard variable rate (SVR). A SVR is likely to be a higher rate than what is available with a remortgage. To confirm the best interest rate available a homeowner has simply to shop online for a new deal.

Visiting the websites of remortgage lenders could offer a quote after only a few answered questions. A one-stop website shopping experience could be done by visiting a remortgage broker’s website. Not only could a remortgage broker offer several quotes from numerous lenders, but a homeowner could discover an exclusive deal. The homeowner could then review and compare quotes to determine the best remortgage opportunity.

Even homeowners that are not yet at the end of their mortgage term are encouraged to shop online. Some homeowners have chosen to take on a penalty fee to end their term early to remortgage now rather than choose from remortgage offers when their term ends should interest rates continue increasing.

Remortgage shopping is simple and quick online and could be the answer to the hard financial questions homeowners have due to the current economic conditions.