This week, we saw inflation drop to 2% and interest rates remained on hold – but what does this mean for the finances of dental professionals over the next few months?
On Wednesday, it was announced that inflation has dropped to the Bank of England’s target of 2%. This is the first time it has hit the target in almost three years.
Prices rose at 2% in the year to May, down from the 2.3% the month before, stats revealed.
On Thursday, however, the Bank of England chose to hold interest rates at 5.25% – a 16-year high – for the seventh meeting in a row.
Governor Andrew Bailey said policymakers ‘need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25% for now’.
‘Relatively high’ borrowing
Iain Stevenson, head of dental at Wesleyan, said: ‘Although inflation has now hit the Bank of England’s two per cent target, the MPC is maintaining its cautious approach.
‘Those dentists who have been waiting for rates to fall – potentially to fund practice expansion, or to purchase new equipment – will need to wait until August at the earliest for the next chance of a cut. In the meantime, the cost of borrowing is likely to remain relatively high.
‘The decision will also impact mortgage holders and mortgage-seekers. The current level of rates means some dentists may find themselves being priced out of the market or facing steep repayment costs.
‘For those looking at their mortgage or re-mortgaging options, consider speaking to a financial adviser. They can help you review the whole of the market, and identify the best deals for your specific circumstances.’
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