Despite inflation holding at 3.8%, nearly double the Bank of England’s 2% target, expectations for an interest rate cut next month remain low. 

The figure, though elevated, came in below forecasts—economists had anticipated a September peak of 4% before any decline and still, the central question persists: will rates budge?

A spokesperson for a mortgage lender says: “The possibility of a November base rate cut has inched from outlandish to outside. Last month the Bank of England predicted that CPI inflation would peak in September, warning that it could breach 4%.

“In that context September’s status quo figure – even if 3.8% is nearly double the Bank’s target – should be seen as a win. The Bank insists the inflationary pain will be temporary, and while headline CPI stubbornly refuses to fall, we are seeing some progress as core inflation continues to tick down.

“Wage inflation is cooling too, and the pace of food price rises is finally slowing – all of which could relieve the inflationary pressure in coming months. But the economy is far from out of the inflationary woods, and no-one should expect interest rates to fall any time soon.”

Another industry spoekesper0n says: “While inflation holding steady at 3.8% reflects the persistent pressures from political uncertainty and elevated costs, the mortgage market continues to remain resilient. In fact, many don’t realise they’re now in a prime position to get onto the property ladder – especially compared to this time last year, or even six months ago.

“A ‘keep calm and carry on’ approach is needed here. While inflation remains well above the 2% target, the housing market remains in a strong place, and more aspiring buyers than ever are realising that they can get on the ladder sooner.”

An industry association spokesperson, comments: “We still sit within a phase where the economy remains sensitive, both domestically and globally. We have seen inflation trend back upwards over the last twelve months; however, we are thankfully in a much better position than we were only three years ago, when the rate of inflation sat at 11.1%.

“The Bank of England is still in a challenging position when it comes to making any calls to further reduce the base rate currently. However, there is widespread optimism into the new year that we could see the Monetary Policy Committee consider new dips in the base rate, all of which should help provide additional affordability for many consumers regarding housing.”