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Friday 14th June 2024

Must-know money: Inflation fever breaking 

Here are our favourite must know money stories this week to help you get your head around your personal finances. 

Inflation

From a sharp fall in inflation figures, to mortgage payments escalating, and how to avoid ticket scams – here are our favourite must know money stories this week to help you get your head around your personal finances. 

Inflation fever breaking, falls beyond expectations 

UK inflation fell to 7.9% in June, according to the Office for National Statistics (ONS), lower than forecasts of around 8.2% from earlier this week.  

A sharp drop in motor fuel prices was the primary reason for easing of inflation rate – taking some cost-of-living pressure off lower- and middle-income households. While transport costs fell significantly, other divisions such as food and beverage, restaurant and hotel, alcohol and tobacco, and clothing remain stubbornly high. 

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Mortgage and credit holders might breathe a sigh of relief as the Bank of England’s base rate may not jump to as high as expected. However, this doesn’t mean that further hikes are not coming. Base rates are still expected to be hiked, and prices are still increasing, just at a slower pace. 

While it is a step towards the right direction, inflation is still nearly four times the Bank of England’s target rate – and we are yet to see the full impact of rate rises on consumers and the economy.  

Alice Haine, personal finance analyst at investment platform Bestinvest, said that the fall in inflation “will deliver some relief to households, with the bigger-than-expected decline offering hope that the long run of tearaway prices rises is finally over.” 

She added: “The improving inflation data is unlikely to prevent the Central Bank from pushing ahead with another interest rate rise when the Monetary Policy Committee meets next month – as high prices are still causing significant pain for households and businesses up and down the country. But at least the numbers are moving in the right direction with markets now expecting rates to peak below 6% in March next year.” 

Mortgage payments set to jump by £500 

The Bank of England said mortgage payments will rise by at least £500 a month for nearly one million households by the end of 2026, reports Tom Espiner for BBC News.  

According to the Bank’s Financial Stability Report, over two million households will pay between £200 and £499 more monthly by the end of 2026, and a further one million mortgage holders will see their monthly payments rise by at least £500. 

The Bank said mortgage holders “may struggle with repayments” on loans. as fixed-rate mortgage deals expire and renewed loans see mortgage repayments go up. It added that lenders are strong enough to withstand a rise in customers defaulting on repayments. 

The Bank has consecutively raised interest rates from 0.1% in December 2021 to 5%. In June, Chancellor Jeremy Hunt said that the Bank has “no alternative” but to raise rates. 

Households and firms alike have been under pressure as interest rates have risen in a bid to lower high inflation. Furthermore, expectations of borrowing costs rising has pushed up mortgage payments for the already-stretched UK households.   

How to avoid festival and gig ticket scams 

With many popular events selling out in double-quick time, all is not lost if you are not successful. However, it pays to be cautious when trying to bag a last-minute ticket, writes Suzanne Bearne for The Guardian. 

  • Scour genuine resale sites: Check out websites that sell resale tickets, such as Ticketmaster, TicketSwap, or Twickets. Ticketing apps like Dice allow you to join waiting lists for sold-out gigs too.
  • Too good to be true: Scammers are becoming increasingly savvy, and a spokesperson from an internet safety website added that “if it’s too good to be true, it probably is.”
  • Check the person’s profile: Some of the obvious warning signs are found here. Few friends/followers, only recent posting activity, switched off comments, foreign location settings, excessive retweeting, or low engagement are some of the red flags to look out for.  
  • Use ‘reverse image’: Scammers often scrape photos of tickets online. A reverse image search on google might be able to spot if the image is available elsewhere online. You can also apply the same approach with the seller’s profile pictures. 
  • Pay by credit card: Most scamsters push buyers to pay via direct bank transfers. Credit cards provide fraud protection between £100 to £30,000, and if you can demonstrate that you have been defrauded, the amount should be refunded. 

In case you’re a victim of scam, take pictures and screenshots of your conversation, report and block the fraudsters accounts, and contact your bank to try and stop the transaction immediately. You can further report them to Action Fraud, the national fraud reporting centre. 

Photo credits: Pexels

Richa Ved

Richa is a young Indian graduate from Warwick Business School, aspiring to find her niche in the media industry. She has a passion for writing and a keen interest in financial affairs. If you don’t find her working, she’s probably having a pizza (her favourite!) and a pint of beer somewhere.

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