May Property Market 2024

Inflation at a 3-Year Low

Inflation fell to 2.3% which is the lowest level for the past three years. However, the drop in inflation wasn’t as much as what was predicted. Analysts predicted that the inflation rate would fall to 2.1%, closer to the Bank of England’s 2% target. This Makes the chance of an early interest rate cut decrease. The main reason for a decrease in the consumer prices index (CPI), was due to the falling energy and food costs.

With the rising pressure on individuals to stay within budgets, there is a reluctance to buy high-priced items. Furniture retailers reduced prices by 0.9% in the past 2 months, and the cost of all goods dropped by 0.8% month on month, due to the fall in demand. Annual services inflation, which usually measures the costs companies charge each other, was steady currently at 5.9%, barely down from the previous month’s 6%.

A sharp spike in property rents and higher mortgage costs over the last year has kept the measure of inflation that includes housing costs much higher than the main CPI. The consumer prices index including housing rose by 3% year on year as a result of these factors.