Just Mortgages comments on CPI inflation figures

15 January 2025

John Phillips, CEO of Just Mortgages and Spicerhaart, said: “News of a slight drop in inflation is certainly a surprise and contradicts the expectations of the markets and many analysts. This will no doubt be welcome news for ministers – not least the Chancellor who faces considerable pressure as uncertainty rips through the UK financial markets.

“How likely the UK is able to sustain this slowing in inflation is still up for debate, especially given the fallout from the recent Budget and the implications for businesses, as well as the growing prospect of US tariffs days away from Trump’s inauguration. All have had an impact on market expectations with rising gilt yields and government borrowing costs.

“The Bank of England stands at a crossroads between managing sticky inflation and supporting economic growth. The latter cannot be understated given growing fears of stagflation. A slight reprieve or not, will a surprise slowing of inflation encourage the central bank to act faster than perhaps many are expecting – giving hope to those wanting to see further movement on interest rates.

“Either way, a remedy is clearly needed to help kickstart economic growth. In our world, we have seen a really positive start to the new year with high levels of buyer registrations and mortgage enquiries. If the MPC is able to respond to this positive news at its first meeting next month, that will certainly help sustain this.”