The Office of National Statistics (ONS) has revealed that UK inflation has fallen to 6.8% in the year to July, down from 7.9% in June. This comes as wages had reportedly risen to 7.8% annually between April and June.
Despite inflation falling and wages rising, it does not mean that prices are coming down, but rising less quickly.
The ONS has reported “core inflation” remained unchanged in July at 6.9%, meaning the cost-of-living remains high for the average Brit, putting pressure on household finances.
In light of this, Group Chairman of Cornerstone Tax International, David Hannah, discusses the recorded fall in inflation and its impact on the property market.
Hannah said, “The reported fall in inflation today is a positive step in the right direction. Coupled with the fact that wages have once again risen, it may mean that the future will not look as bleak as many expected at the start of the year. So far, the government’s aim to cut inflation is working, yet they have some way to go if they want to get it back down to 2%.
“Concerningly, factors such as the unchanged rate of core inflation on goods and services mean that the average household is still experiencing enormous pressure.
“Interestingly, with wages up and inflation falling, we have also seen house prices fall by 0.3% in July, and subsequently, three of the UK’s largest mortgage lenders have slashed interest rates on their mortgages.
“Despite the fall in inflation, many are still expecting another Bank of England rate rise next month, which I feel would only serve to add to the already insurmountable pressure on homeowners.”
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