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Industry News: OBR predictions and key assumptions relating to October 2024 Budget

Financial Reporter

Budget 2024: OBR reveals forecasts for house prices, mortgages and interest rates

“The OBR says market expectations for interest rates remain volatile and predicts further increases in mortgage rates.” Click to read original article >>>

The Office for Budget Responsibility (OBR) has outlined its forecasts for house prices, inflation, mortgage rates and interest rates following yesterday’s Budget.

House prices

House prices are expected to rise by 15% over the forecasted period from 2024-2030, according to the OBR.

CPI inflation

Having fallen back to around the 2% target in mid-2024, the OBR expects CPI inflation to pick up to 2.6% in 2025, partly due to the direct and indirect impact of Budget measures. Inflation then slowly returns to the 2% target by the forecast horizon.

Bank Rate

From its current level of 5%, Bank Rate is expected to fall to 3.5% in the final year of the forecast.

Mortgage rates

Average interest rates on the stock of mortgages are expected to rise from around 3.7% in 2024 to a peak of 4.5% in 2027, then remain around that level until the end of the forecast.

Picture of Author: Stuart Phillips

Author: Stuart Phillips

Fully CeMap qualified, Directly Authorised by the FCA and with over a decade of experience, Stuart has a wealth of experience in both specialist BTL and residential mortgages.

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