The Office of National Statistics (ONS), the UK’s statistics authority, has released its latest report on inflation, revealing that the consumer prices index (CPI) has dropped from 2.8 per cent in the 12 months to February, to 2.6 per cent in the 12 months to March. While the majority of the fintech industry has let out a sigh of relief at the falling inflation numbers, concerns for long term success remain.
The UK government has set an inflation target for two per cent, so surely the statistics from the ONS would ease concerns surrounding inflation? On the surface, the latest figures indicate things are heading in the right direction, especially given that they follow a downward trend from the start of the year (three per cent in January and 2.8 per cent in February).
Welcome news
Looking optimistically on the future of the UK, Richard Pike, chief sales and marketing officer at Phoebus, the bank and lender software supplier, remarks that the ONS’ release could have a positive knock on effect on the Bank of England.
“This surprise fall in inflation is a welcome development for the economy and the property market alike. While many had expected inflation to hold steady or even rise slightly due to upward pressure from labour costs, utility prices and global trade factors, today’s figures suggest those effects may be easing more quickly than anticipated.
“This unexpected dip could strengthen the case for the Bank of England to bring forward a base rate cut – a move that would be warmly welcomed across the housing market. Lower interest rates would help alleviate affordability pressures, unlock greater borrowing potential and support increased mortgage activity as we move into what’s traditionally a busy season for home moves.”
Give it time
Nick Hale, CEO of Movera, the panel management, conveyancing and property services tech provider, explainsthat any response from the Bank of England wouldn’t be instant, but remains a possibility: “After a turbulent winter and an economic contraction in early 2025, any indication that price pressures are easing will be greeted with cautious optimism.
“While it is unlikely to shift the Bank of England’s thinking on interest rates quite yet, a downward trend in inflation strengthens the case for a cut in the coming months, something that would certainly be warmly welcomed by homebuyers and homeowners alike, particularly as affordability remains one of the biggest barriers in the housing market.
“Even in uncertain times, Movera remains committed to helping people move home with confidence. Whether rates shift sooner or later, we will continue to deliver fast, reliable services for those looking to make their next move.”
A cautious exhlae
Despite the optimism shared by the industry, concerns about longevity remain. For Paul Noble, CEO of Chetwood Bank, the UK digital bank, stability has not been confirmed, especially given that the impact of Donald Trump‘s tariffs are yet to be experienced long term. He said: “Today’s inflation figures suggest a fragile but promising momentum – a second month of stability that hints we may be turning a corner, though not yet out of the woods.
“For many, this will feel less like a breakthrough and more like a cautious exhale, especially given the many troubling factors surrounding the economy.
“The Spring Statement outlined a careful balance between support and sustainability – and today’s figures should give the Chancellor a little more breathing room. That said, looming global pressures, including President Trump’s tariff policies, could still feed into rising costs in the months ahead. The path to long-term price stability is far from guaranteed.
“For now, the Bank of England may feel more confident in its long walk to rate cuts, though it will remain watchful of any external shocks. This is also a crucial moment for savers – locking in strong rates while they remain available could provide valuable protection. Lenders and financial institutions have a duty to offer smart, flexible options that help customers navigate an uncertain landscape with confidence.”
The cost of living reality tells a different story
Matthew Allen, lecturer in economics and macroeconomic expert at the University of Salford, expressed that the headline figure provided by the ONS masks the broader economic pressures that continue to affect households and businesses across the country.
He said: “While inflation is technically easing, the reality is that the cost of living remains stubbornly high. Council tax, water bills and energy prices have all risen by over five per cent, meaning that many families will still feel financial pressure despite the overall decline in inflation. The Office for National Statistics (ONS) has projected that inflation is unlikely to fall below the two per cent target until 2027, this suggests that the squeeze on consumer and business budgets will persist for the foreseeable future.
“Looking ahead, the Autumn Budget from Rachel Reeves is expected to include a series of tax rises. These could further erode disposable income and place additional strain on both households and businesses. Internationally, the looming impact of Donald Trump’s proposed tariffs adds another layer of uncertainty.
“While the UK secured a reciprocal tariff rate of 10 per cent, half the level imposed on EU nations, there’s still ambiguity about how this will translate to prices on the ground, particularly for imported goods and supply chains.
“In short, while the inflation figure is moving in the right direction, it’s far too early to say the UK is out of the woods. Structural cost increases and looming policy changes mean that the financial challenges for consumers and businesses are far from over.”
Sharing a similar sentiment, Dr Maria Paola Rana, lecturer in economics at the University of Salford, added: “The good news is not expected to last long, given the increase in labour costs due to the rise in minimum wages and national insurance are expected to be reflected in next month’s figures. The Chancellor herself has admitted that ‘there is more to be done’.”
