UK mortgage borrowers face highest inflation rate: ONS

UK HOMEOWNERS with a mortgage faced the highest personal rate of cost inflation in the year to September as interest rates hit people’s disposable income, the Office for National Statistics (ONS) said.

The ONS household cost index, which measures of how changing costs affect different subsets of the UK population, showed the average mortgage borrower had a 9.3 per cent personal rate of inflation, far above the headline 6.7 per cent consumer prices index for September.

Private renters had a 7.2 per cent HCI rate, and outright owners a 7.4 per cent rate. The increase in interest rates, which soared from near zero at the end of 2021 to 5.25 per cent currently, drove up borrowing costs for households.

As wealthier people tend to own their homes, their personal inflation rate was higher than the poorest. It was only the second time since March 2022 that the wealthy have had a higher cost inflation rate, as rising energy and food prices have tended to hit poorer families harder.

The ONS HCI weights the indices to reflect spending habits. Poorer households spend a greater share on essentials like food and energy, where the inflation rate has been falling. Richer households spend more on mortgage debt. BLOOMBERG