What latest inflation figure means for interest rates and your mortgage

Inflation in the UK stayed put at 6.7 percent last month, despite expectations that it would fall again. The Office for National Statistics (ONS) said that Consumer Prices Index (CPI) inflation remained at the same rate as recorded in August, as easing food and drink price rises in September were offset by higher petrol and diesel prices.

It comes as analysts had predicted inflation would dip to 6.6 percent last month, which is still a long way away from the Bank of England's (BoE) 2 percent target. To keep inflation low and stable, the Government set the BoE an inflation target of 2 percent in a bid to grow the economy.

Whilst there is still pressure on the Government to meet its pledge of halving inflation in 2023, it will need the inflation rate to fall to below 5.4 percent by the end of the year. To do this, the Bank of England may need to raise interest rates once again.

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Raising interest rates is the best way the Bank can ensure inflation comes down and stays low, as higher interest rates will mean that less money will be spent in the UK. But with central banks increasing their rates, this influences the interest charged on things such as your mortgage.

Experts are now predicting that this unchanged inflation may cause the BoE to raise interest rates at its next Monetary Policy Committee meeting, which could be bad news for homeowners especially first-time buyers. Amanda Aumonier, director of mortgage operations at Better.co.uk said:“Sticky inflation can be bad news for first-time buyers, whose dreams of property