UK mortgage rates fall first time in two months on better inflation figures

By
Business Desk
A man looks at houses for sale in the window of an estate agent in Manchester, Britain, June 22, 2023. — Reuters
A man looks at houses for sale in the window of an estate agent in Manchester, Britain, June 22, 2023. — Reuters 

The better inflation figures in the UK have led to a decrease in the average two-year fixed mortgage rates for the first time in two months, BBC reported. 

The mortgage rate fell to 6.79%, its first drop since May 27, down from 6.81% on Wednesday, as per the figures from Moneyfacts. 

Both two and five-year fixed-rate deals have dropped in hopes that the Bank of England may not raise interest rates as much as expected before. 

The five-year rate fell by 6.31% as compared to yesterday's number of 6.33%.

Over 40,000 people were expected to renew deals at higher costs after moving off existing fixed deals between July and September. 

Since December 21, the interest rates have been raised 13 times by the Bank of England in a bid to restrict the increasing prices. 

However, inflation had fallen from 8.7% in the year to May to its lowest level in more than a year, the figures showed on Wednesday. 

But it still remains almost four times higher than the bank's target of 2%, hence, the bank will now need to perform fewer base interest rate hikes to achieve the target. 

The rates were expected to exceed 6% but are now estimated at 5.75%, according to CNN.