Consultants warn the autumn was extra dramatic than anticipated, however may very well be a ‘mirage’
Debtors are being instructed there’s not prone to be an ideal time (Picture: Liudmila Chernetska by way of Getty Photos)
Inflation dropped sharply within the 12 months to April final week, but brokers have cautioned debtors in opposition to assuming mortgage charges will proceed to fall within the coming weeks and months, with one describing the steeper-than-anticipated decline in inflation as “a wolf in sheep’s clothes” and one other calling it a “mirage”.
Inflation tumbled greater than forecast to 2.8% within the 12 months to April, down from 3.3% within the 12 months to March, owing to the decrease power worth cap, which offset the affect of rising gas prices triggered by turmoil within the Center East. The Client Costs Index (CPI) rose by 2.8% within the 12 months to April 2026, down from 3.3% within the 12 months to March.
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On a month-to-month foundation, CPI rose by 0.7% in April 2026, in contrast with an increase of 1.2% in April 2025. Grant Fitzner, chief economist on the Workplace for Nationwide Statistics, stated there was “a notable fall in annual inflation led by decrease electrical energy and fuel costs”.
He continued: “This was as a result of Authorities’s power invoice assist bundle decreasing variable and glued tariffs, together with decrease world wholesale power costs earlier than the battle within the Center East, which fed by to the discount within the Ofgem cap.”
However, Mr Fitzner highlighted that elevated crude oil and petrol costs are pushing the price of each uncooked supplies and manufacturing facility items upwards.
Shaun Sturgess, director at Swansea-based Sturgess Mortgage Options, stated: “This knowledge may very well be a wolf in sheep’s clothes for debtors. There’s a likelihood that debtors will see the headline determine exhibiting inflation is falling and consider that charges might quickly be coming down.
“The truth is that this knowledge is masking the total affect of the gas disaster brought on by occasions within the Center East and that inflation might rise sharply over the summer time, particularly if the battle intensifies. That would ship charges greater somewhat than, as this knowledge could make individuals assume, decrease.”
Philly Ponniah, chartered wealth supervisor and monetary coach at Philly Monetary, echoed these considerations: “This drop in inflation will really feel like welcome aid for debtors, however I would watch out about treating it as a real turning level. A lot of the autumn got here from momentary power results and we nonetheless have not totally seen the affect of upper oil costs and Center East tensions feed by into the broader financial system.
“If inflation begins climbing once more over the summer time, expectations round future fee cuts might change in a short time. For debtors, that creates an actual danger. Some individuals could delay fixing their mortgage or refinancing as a result of they count on cheaper offers forward, solely to seek out charges transfer greater once more if inflation stays cussed.
“Ready for the ‘good’ fee can typically value greater than securing certainty. For savers, decrease inflation is constructive as a result of money financial savings are not shedding worth as rapidly, but it surely’s nonetheless vital to evaluate charges often somewhat than assuming right now’s returns will final.”
Hannah Vandervennin, director of The Mortgage Consultancy, stated: “As we speak’s inflation quantity is welcome, however a piece of the autumn was pushed by the power assist bundle and base results. Each are momentary and oil goes the fallacious approach.
“The price of debtors ready for the proper second is not a barely worse deal. It is the deal you did not do, the property you did not purchase and the remortgage you saved pushing aside till your repair ran out and also you rolled onto your lender’s commonplace variable fee by default. Take a look at your precise state of affairs, decide and transfer ahead.”
Rob Mansfield, Unbiased Monetary Advisor at Tonbridge-based Rootes Wealth Administration, famous that “falling inflation sounds constructive, however costs typically lag world occasions”.
He went on to warn: “With the sustained battle within the Center East, costs usually tend to rise within the months forward, so this may very well be a mirage within the desert on a bumpy highway that’s inflation.”
Justin Moy, managing director at Chelmsford-based EHF Mortgages, cautioned that “debtors want to know how this anomaly within the inflation fee has occurred, and that the total results of the Center East battle do not but present in these numbers”. He added: “Lenders and the markets are already braced for what the following few months will appear like and, as mortgage charges are priced on future prices, important fee cuts are undoubtedly not on the horizon.”
Eamonn Prendergast, Chartered Monetary Adviser at Bromley-based Palantir Monetary Planning, urged savers to not turn into complacent just because inflation had eased.
He warned: “Inflation is the silent erosion of wealth and, even at these ranges, it continues to cut back buying energy over time. Many individuals deal with nominal returns, particularly on money, however the true return after inflation is what actually issues.
“In case your financial savings are incomes 3–4% however inflation is shut behind, the true acquire is minimal. Over time, that may considerably affect long-term monetary plans. The secret’s not reacting to 1 month’s determine, however guaranteeing your technique is constructed to guard and develop wealth in actual phrases.”
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