Today saw the ONS report that the Consumer Prices Index, (CPI) Inflation fell to zero in February.
It has been widely expected for a while that inflation would hit zero and even become negative in the next few months, as a fall in the costs of fuel and food pushes down prices.
Whilst the Governor of the Bank of England remains calm that this disinflation will not lead to more serious deflation and the 2% target will be hit again in the medium term, there will undoubtedly be more pressure for the next move in Bank Base Rate to be a short-term cut rather than a rise, although this is considered a last resort measure by many.
For the mortgage market this could mean we see a fall in the costs of fixed rates once more as SWAP rates edge down and it will be interesting to see if lenders do want to push the boundaries of fixed rate pricing to the lowest levels we saw a few weeks back or they are happy with the current pricing levels.
Low rates will only go so far in attracting new business and for many borrowers anxious to lock in to the low rates on offer, there are more serious criteria issues to address first and foremost to open up the mortgage market further.