Today it was announced that inflation has dropped to 3.4% – but what impact does this have on the financial prospects of dental professionals?
The drop in February to 3.4% from 4% the previous month indicates that the cost of living is rising at the slowest rate since September 2021.
Cafes and restaurant prices, as well as food and non-alcoholic drinks were key drivers of the decrease.
We hear from Wesleyan Financial Services’ Neil Richardson about what this might mean for dental professionals and their future finances.
Neil Richardson, Wesleyan Financial Services
The long-awaited downward trend to inflation confirmed earlier this morning came as welcome news. The slightly larger than anticipated fall to 3.4% in the 12 months to February 2024 has caused intense speculation amongst economists and the media.
There is now speculation that inflation could fall below 2% in April, aided by the fall in the energy cap already set for 1 April. Some economists are even suggesting that inflation could potentially fall as low as 1% later in the year.
The BOE monetary policy committee is due to vote tomorrow on the BOE base rate, and whilst the February inflation figure is not expected to change, the expectation is that rates will hold steady tomorrow. It would appear that the market is starting to feel that decreases in rates from June onwards are ever more likely.
…those dentists coming towards the end of a mortgage deal in the next 18 months will be hopeful that this trend will continue
Many dentists may be asking themselves, ‘what does this mean for me?’ Generally speaking, dentists should be considering the medium-term implications of this.
‘Generally good news’
Those dentists with practice purchase borrowing, which is typically linked to BOE base rate, have been paying eye wateringly large repayments over the last 24 months, and they could finally see their rates and therefore repayments start to fall in summer.
Equally those dentists coming towards the end of a mortgage deal in the next 18 months will be hopeful that this trend will continue and that the rates being offered by mortgage lenders fall with the expected drop in BOE rates.
Ultimately the decrease in the rate of inflation is generally good news. However, we are all still paying significantly more for the goods and services than we were two years ago – this should prompt all dentists to reassess their financial situation, goals and needs with the intention of making sure that they are still on course to reach their life and financial objectives.
Follow Dentistry on Instagram to keep up with all the latest dental news and trends.
