Economists believe inflation rates set to fall
In September inflation reached a 16-year high of 5.2%, but economists believe price raises have now reached their peak and are set to fall.
Although household fuel inflation has hit record highs, oil prices have dropped dramatically to nearly half of what it was in July ($147 a barrel) and annual food price inflation has also dropped by 1.7%.
With the risk of recession looming the credit crisis could see the Bank of England cut interest rates again by up to 0.5%. This would mean rates could come down to 2-3% by the end of 2009.
Lyndon Campbell, Head of Conveyancing at Simpson Millar LLP commented: A cut in interest rates is always good and if passed on to homeowners will help to ease the financial strains of the current economy."