The annual inflation rate fell to 2% in May, meaning it’s finally reached the Bank of England’s long-term target.
This represents a drop from 2.3% in April, while the fall has been largely driven by a drop in food prices.
Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, still sits at 3.5%, though this represents a slowdown from 3.9% in April.
Despite this positivity, the Bank of England is expected to continue holding the base rate at 5.25% tomorrow.
Ben Thompson, deputy chief executive at Mortgage Advice Bureau, said: “May’s inflation drop, in other circumstances, may have prompted some positive movements in the mortgage market. But, with rate cuts largely priced in, the Fed dragging its heels and a General Election in a matter of days, the Bank of England will be reluctant to make any waves.
“This doesn’t mean it’s a time to sit still for those aiming to get on the property ladder or with mortgage deals due to expire. Mortgage rates are unlikely to drop really significantly when the Bank of England does cut rates, so now is the time to get on the front foot, speak to a broker and get mortgage ready. There are competitive deals on the market to be taken advantage of.”
Lettings and estate agency group Propertymark would like to see the Bank cut the base rate to stimulate growth.
Nathan Emerson, its chief executive, said: “With inflation now back down to the levels initially targeted, Propertymark is extremely keen to see this now inspire a drop in interest rates when the Bank of England Monetary Policy Committee meet tomorrow.
“Since the start of the year, we have witnessed many hints that rates may see a cut midyear and we now want to see this all click into place,
