Cheaper mortgage payments ‘lead to lower inflation rate’

Falling mortgage interest payments have contributed to another drop in inflation, new figures have revealed.

The Office for National Statistics reported that retail prices index (RPI) inflation declined 1.2 per cent in April, citing the Bank of England’s decision in March to cut the base rate to 0.5 per cent as a reason for this.

Mortgage borrowers may have benefited from the interest rate reduction, with repayments being lowered, aiding them with their debt management.

In addition, rent and council tax both had a downward effect on the RPI figure, while cheaper gas and electricity bills had an influence on consumer prices index inflation.

This rose by 2.3 per cent in April, which was lower than March’s increase of 2.9 per cent.

Meanwhile, figures from the Alliance Trust Research Centre indicated that the level of inflation faced by over-75s fell by 3.9 per cent, but still stands at 70 per cent higher than the official rate.

By Jamie Price


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