Cost of living - latest: Another UK interest rate hike now 'probable' as inflation not falling as much as expected (2023)

Cost of Living Specialist Megan Baynes says:If you add someone to your mortgage, there are two ways to do this:

Joint Tenants: The parties involved usually own a certain percentage of the property (it doesn't have to be 50-50). If one of the parties dies, the house does not automatically pass to the other joint tenant.

Co-tenants: This is the most common option. Both parties would have equal rights to all property. Upon death, ownership passes to the second owner.

I suspect he wants to be a co-tenant, because then he has equal rights to the property.

You will be subject to the same standard checks as anyone applying for a mortgage based on your income and affordability.

You may also be charged stamp duty as you are technically considered to be buying part of the property and this involves legal changes to the title deeds.

If you decide to go this route, you should consult an attorney first. I would advise contacting someone who specializes in housing for an initial consultation; You will be able to talk about your exact circumstances and tell you what is possible.

Another option could be for the father to mortgage the property and then apply for a new joint mortgage; as a result, you apply for a new mortgage. In that case, if you are looking for the best deal, you should hire a mortgage broker to help you.

Bob Singh of Chess Mortgages told me, “It would certainly be possible as long as the income is sufficient. Lenders will check your credit file unless it's very recent."

Ultimately, he said, "good mortgage advice is key2 so before you do anything, check with someone you trust or somewhere with good reviews.

Five major banks have broken the law by sharing sensitive information about trading government bonds in online chat rooms, Britain's competition watchdog has preliminary ruled.

Citi, Deutsche Bank, HSBC, Morgan Stanley and RBC illegally exchanged information in one-on-one conversations in Bloomberg chat rooms, according to the Competition and Markets Authority (CMA).

The talks, which included the buying and selling of UK government bonds, were allegedly held by some traders between 2009 and 2013.

"This may have deprived taxpayers, retiree savers and financial institutions of the benefits of full competition for these products, including minimizing borrowing costs," said Michael Grenfell, CMA's executive director of finance.

He added that Deutsche Bank and Citi admitted to being involved in the alleged talks involving them, but that HSBC, Morgan Stanley and RBC (Royal Bank of Canada) admitted no wrongdoing.

The CMA said its investigation was ongoing and that it could eventually impose fines if it found two or more banks engaged in anti-competitive activities.

As we've been highlighting all morning, prices have increased by an average of 8.7% over the past 12 months, putting pressure on already strained household budgets.

But by how much did their individual spending increase? Use our calculator to see how much the food, clothing and entertainment you pay for are increasing.

According to the Office for National Statistics (ONS), average UK house prices rose by 4.1% in the 12 months leading up to March.

A typical property now costs around £285,000 - £11,000 more than at the same time last year.

But the March figure is £8,000 lower than the last high in November and £3,000 lower than February.

Here is a nationwide breakdown of house prices and their rise since March 2022:

• England - £304,000 - up 4.1%
• Walia - 214 000 £ - do 4,8%
• Scotland - £185,000 - 3% increase
• Northern Ireland - £172,000 - up to 5%

Regular readers will remember earlier this week when Rightmove said home prices had risen over the past month. Their numbers are up to date while the official numbers released by the ONS are behind schedule.

Our Ed Conway isn't the only one who thinks the current rate of inflation could trigger another rate hike.

Pantheon Macroeconomics said the drop from 10.1% to 8.7% was "too small".

Of course, interest rate hikes are one way the Bank of England curbs inflation because it means people have less money to spend and are encouraged to save, and when that happens prices tend to rise more slowly.

Pantheon Macroeconomics says: "A further hike in bank rates to 4.75% at the next MPC meeting on June 22, from 4.5%, is now firmly on the table."

Soaring food prices and rising inflation in the service sector will be a "worry" for the bank, the company said.

As for what will happen to inflation now, Pantheon Macroeconomics points to something to expect tomorrow…

“CPI inflation will continue to decline rapidly in the coming months. Tomorrow, Ofgem is likely to announce that the average household's annual energy bill will fall to around £2,050 in July, down 18% from its current level of £2,500.

"This causes a decrease in the share of energy in the nominal rate."

Ed Conway, economist and data editor

They sometimes call economics "dark science," and if you listen to economists, you'll understand why.

Inflation, the rate at which prices rise each year, has fallen below double-digit levels for the first time since last summer, from 10.1% in March to 8.7% in April.

Finally, the cost of living in crisis, or rather the rate at which the crisis deepens, is starting to slow down. So why are economists so gloomy today?

Coming back to the fact that there are two separate problems under this huge rate of inflation. And while the news from one is good, the news from the other is bad.

Let's get the good news first.

The main reason for the increase in the cost of living in recent years is the increase in energy prices.

They are reflected in our household bills and fuel costs, and to some extent everywhere. It was an unhappy period for many.

The good news is that some of that pressure is beginning to ease. While utility bills are still many times higher than they were a few years ago, the rate of increase is slowing (remember, inflation is an annual growth rate, not absolute levels).

The biggest spikes in energy bills happened more than a year ago, so the annual rate of energy price inflation doesn't seem so dramatic anymore.

And tomorrow there will be better news on that front when Ofgem announces the final level of the energy price cap that will set household bills later this summer.

It is expected to fall for the first time in years.

But something else is also happening here. Because when economists look at inflation, it's usually not higher fuel or food prices that affect it the most.

While they are painful for households, these prices are quite volatile from year to year. But remove these volatile elements of headline inflation and you get what is called "core inflation."

This is a better measure of the underlying direction of inflation. If core inflation is high, it means that headline inflation is more likely to remain high not just in the short term, but in the long term. And core inflation is currently high.

Instead of falling like the general rate in April, it even rose from 6.2% to 6.8%, the highest level in three decades.

This is a number that is of deep concern to economists, as it suggests that there is a possibility that inflation is embedded in the economy, that households and businesses are beginning to assume that prices will continue to rise for some time to come.

In other words, while today's reported number may sound like good news to most of us, and in some ways it is good news, the picture underlying today's numbers is quite the opposite. This suggests that inflation is more sticky, which is a bigger problem than previously thought.

As a result, the Bank of England will likely look at today's numbers and assume its work is not done yet.

Your task is to keep inflation as close to 2% as possible, and given today's numbers, that task seems much more difficult.

So there is a good chance the bank will raise interest rates again to 4.75% at its meeting next month. And then perhaps even more, which will only increase the pressure on many households.

As grim as it may seem, this cost of living crisis is far from over.

To help with rising food prices, Asda has announced that it will keep the £1 Kids Eat café meal deal for the next six months.

Over the two Easter weeks, the supermarket served more than 115,000 meals.

"The deal stands out from other retailers because there are no hidden extras like minimum spend for an adult," said Asda.

The menu includes, among others: Penne pasta with meatballs and a vegan pasta dish with hidden vegetables. Children also receive a free piece of fruit with the purchase of the £1 hot meal deal.

As an alternative to a hot meal, Asda Cafés also offers a choice of cold and mixed meals for £1, including a sandwich, a drink and a piece of fruit.

While it is positive that inflation has fallen to 8.7%, it is still far from the Bank of England's target of 2% and as we said, the headline figure is not falling as fast as expected.

Referring to the problem of core inflation, which we described in our post at 7:42 am, Jake Finney, an economist at the PwC accounting firm, said: it increased from 6.6% to 6%..9%%.

"This is the highest interest rate since March 1992 and above the Bank of England forecast of 6.7% earlier this month."

Following today's announcement and "continued inflationary pressure", he believes the Bank will miss its 2% target by the end of 2024.

"By then, consumer prices could have increased by as much as a fifth," he added.

Still, Finney predicts that inflation will continue to fall in the coming months, with another significant drop likely in July, when the energy price guarantee expires.

"At this point, large drops in wholesale gas prices will start to translate into lower energy prices for UK consumers," he said.

That's what Grant Fitzner, chief economist at the Office for National Statistics, said in interviews this morning.

"We're not in the double-digit area anymore," he told BBC Radio 4. "We've seen declines in bread, cereals, fish, milk, cheese, eggs, sugar, jam and honey, that's positive."

But...

"Let's not forget that many supermarkets have standing contracts that can take six to 12 months to complete as these contracts expire, hopefully renegotiated to bring prices down.

"It's going to take some time for that to come down to retail prices."

Chancellor Jeremy Hunt outlined his reaction to the inflation figures.

“The IMF said yesterday that we have taken strong action to fight inflation, but while it is good that it is now in the single digits, food prices are still rising too fast.

"So, in addition to helping families with around £3,000 of cost-of-living support this year and last year, we need to stick hard to the plan to reduce inflation."

We also received feedback from Shadow Chancellor Rachel Reeves, who said: "As bills rise, families will worry about food prices and the cost of other necessities will continue to rise.

"You'll wonder why this Tory government continues to refuse to adequately address the cost of living crisis and why it fails to introduce a proper tax on the windfall profits of oil and gas giants."

She said Labor's mission was to ensure the most sustainable growth possible in the G7 to improve the situation for families.