Shock inflation rate rise kills hope of base rate cut

So much for a pre-Christmas rate cut. This is a real blow to the economy, mortgage holders and bricks and mortar. Inflation is on the way up again, quite aggressively too, and that means rates will stay higher for longer. It feels like the whole economy has deteriorated since the Budget."

Daniel Hobbs, Managing Director at New Leaf Distribution, said

Stand by for mortgage rates to keep increasing and a base rate hold in December. Inflation will go up again due to the recent Budget.”

Looking ahead, Michelle Lawson, Director at Lawson Financial, said

This month's unwelcome return above the inflation target is unlikely to be a one-off: inflationary pressures look set to keep prices rising more quickly

Sarah Coles, head of personal finance at Hargreaves Lansdown, said

It's higher inflation and lower growth under Labour.

Tory shadow chancellor Mel Stride said

Darren Jones (politician)treasury chief secretary

We know that families across Britain are still struggling with the cost of living

Darren Jones, chief secretary to the Treasury, said

While we think the Bank of England will continue to cut rates in 2025, the pace of rate cuts is expected to be slower than previously anticipated, and rates may stay elevated for longer,

said Monica George Michail, an economist at the National Institute for Economic and Social Research, a think tank that now reckons inflation will push above 3% in early 2025

This outlook reflects forecasted inflationary pressures stemming from the recently announced budget, in addition to heightened global uncertainty, particularly surrounding the Trump presidency,

she added

Locking in the best savings deal possible, while rates remain higher, is the best inflation-beating strategy, particularly for those with cash languishing in an account delivering dismal returns.”

Ms Haine urged

With the latest inflation reading confirming that inflation has not only risen back above the Bank’s 2% target but has come in higher than expected, it means that mortgage borrowers could have more pain to contend with if more lenders adjust their rates upwards.”

Ms Haine warned

The cost of raw materials for businesses continued to fall, once again driven by lower crude oil prices."

However, he noted

Despite the recent interest rate cut and the downward trajectory of inflation, a number of potentially inflationary forces have been unleashed.”

Scott Douglas, capital markets director at international corporate finance firm Centrus, commented