Inflation comment from Adam Oldfield at Phoebus

20 December 2023

Adam Oldfield, chief revenue officer at Phoebus Software, says: “The drop in inflation to 3.9% is greater than almost everyone expected. It will be welcome news to many as we head into Christmas and with wages rising at almost double the rate of inflation at 7.3%, many should now start to feel better off than they have done for a considerable time. That said, there appears to be a real divide between those with money and those with less, for whom any inflation causes a very real impact. 

“Of course, inflation is still almost double the 2% target that the Bank of England is set, so further measures will need to be taken, but it means that while interest rates are unlikely to fall just yet, that decreases may well be on the cards by the second quarter of 2024 if inflation continues on its downward trajectory.  The markets already appear to be pricing this into mortgage rates, which have been dropping over the past two months. Good news for the 1.3million people still due to come off their five-year fixed rate mortgage next year.

“These will no doubt be very welcome figures for the government as it looks to set a date for the general election next year.”