Borrowers and lenders will be looking for “greater clarity” after the autumn budget as inflation hits 3.5% in the latest Consumer Price Index (CPI) from the Office for National Statistics (ONS).
A combination of increased fuel prices and airfares contributed to the rise in inflation, the highest rate since October 2025, which continues to sit above the Bank of England’s 2% target.
Commenting on the latest data CEO of Just Mortgages, John Phillips described the current picture of the mortgage market as “mixed” due to lenders moving rates in both directions.
Phillips said: “The rise in CPI inflation to 3.5% reflects these renewed cost pressures, particularly around fuel and energy, against a continued backdrop of geopolitical uncertainty.
“The wider economic picture though remains mixed with the latest GDP figures showing the UK economy continuing to grow, suggesting that there is still some resilience despite the pressures facing households and businesses.”
The latest inflation figures suggests an “increase” in the chances of an interest rate rise by the Bank of England policy makers, the BBC said, while the news could further imply the chancellor has “little spare cash” to provide as “breathing space” for households and businesses as promised without resorting to tax rises, deputy economics editor at the BBC, Dharshini David reports.
Rachel Geddes, strategic lender relationship director at the Mortgage Advice Bureau, stressed the importance of the Bank of England’s next moves: “Lenders set their fixed rates based on where they expect interest rates to go, not where they are today.
“Inflation data like this can shift those expectations before the Bank does anything, so a mortgage offer… now may look different by November’s base rate decision.”
Nathan Emerson, CEO of Propertymark commented on the latest ONS figures, saying: “We remain in a finely balanced economy, where every fluctuation has the potential to raise affordability concerns for many households and influence confidence across the wider housing market.
“Over the past few weeks, we have seen several lenders withdraw what were previously considered more competitive mortgage offerings, highlighting how quickly conditions can change for those looking to buy a property or secure a new mortgage deal.
“While base rates have remained steady since late last year, many households have continued to face significant financial pressures, with rising energy costs and increasing prices on the weekly shop adding to the strain on household budgets.
“With the Autumn Budget now only a week away, expectations will be high regarding any measures that may be announced to address housing and overall household affordability moving forward.
“Any decisions affecting taxation, housing supply or the cost of living could have wider implications for consumer confidence and activity across the property market.”
The ONS also published the latest House Price Index this week which showed on average, house prices have not kept pace with inflation. In England, Scotland, Wales and Northern Ireland.
A rise of 0.3% on August, 0.7% since June 2026 and an annual increase of 0.9% makes the average property in the UK worth £273,000.
