rates21 October 20263 min

What does September's inflation mean for your mortgage?

September's inflation figure came in higher than the previous month and remains well above the Bank of England's 2% target (Bank of England, October 2026). Here is what that means for tracker and fixed-rate borrowers ahead of the next MPC decision.

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At a glance

CPI, September against August3.5%, up from 3.1%Consumer Prices Index inflation was 3.5% in the 12 months to September 2026, up from 3.1% in August (ONS, 21 October 2026).Source: Office for National Statistics (opens in a new tab)
Inflation target2%The Bank of England's inflation target, set by the Government, is 2% on the Consumer Prices Index (Bank of England, October 2026).Source: Bank of England (opens in a new tab)
Bank Rate3.75%Bank Rate is 3.75% (Bank of England, 17 September 2026).Source: Bank of England (opens in a new tab)
Next Bank Rate decision5 November 2026The next Bank Rate decision is due on 5 November 2026 (Bank of England, 19 October 2026).Source: Bank of England (opens in a new tab)
The last MPC vote6–3 to holdThe Bank of England's Monetary Policy Committee voted 6–3 to hold Bank Rate at 3.75%, with three members voting to raise it to 4% (Bank of England, 17 September 2026).Source: Bank of England (opens in a new tab)

Published 21 October 2026. Figures correct as at this date.

The September inflation figure landed this morning, and for anyone on a variable mortgage or approaching the end of a fixed deal, it is worth understanding what it does — and doesn't — mean for your rate.

What did September's inflation figure show?

Consumer Prices Index inflation was 3.5% in the 12 months to September 2026, up from 3.1% in August (ONS, 21 October 2026). That puts it well above the Bank of England's inflation target, set by the Government, of 2% on the Consumer Prices Index (Bank of England, October 2026). The direction matters: this is a rise, not a fall, and it gives the Monetary Policy Committee more to weigh at its next meeting.

How does inflation affect tracker mortgage rates?

Tracker rates follow Bank Rate, not CPI directly. Bank Rate is 3.75% (Bank of England, 17 September 2026), and any change to it passes straight through to tracker payments — cuts lower them, rises increase them. Inflation is one of the things the Monetary Policy Committee weighs when it sets Bank Rate. On its own, it does not change tracker rates. The rate only moves if the MPC decides to move it.

How does inflation affect fixed mortgage rates?

Fixed deals do not reprice mid-term — if you have a fix in place, your rate stays exactly as agreed until it ends. New fixed-rate deals, however, are priced from swap rates, which reflect what markets expect Bank Rate to do over coming months. Swap rates can move up or down before any MPC decision is announced, so fixed-rate pricing can shift in either direction even when Bank Rate itself has not changed.

What might the November MPC decision mean for borrowers?

The next Bank Rate decision is due on 5 November 2026 (Bank of England, October 2026). The Bank of England's Monetary Policy Committee voted 6–3 to hold Bank Rate at 3.75%, with three members voting to raise it to 4% at its September meeting (Bank of England, 17 September 2026). Inflation is one of the things the MPC weighs, alongside employment, wage growth and wider economic conditions. Nobody knows what it will decide.

What are your options before your deal ends?

If your fixed deal ends in the next six months, many lenders let you reserve a new rate before it ends, so you can see what is available without committing.

Our first conversation covers what this means for your own mortgage specifically, and there is no obligation. Our standard fee is £495, payable when your application is submitted. In some more complex cases, an additional broker fee of up to 1% of the loan may apply. The first conversation is always free, and we always confirm your total fee in writing before any work starts. To talk through your situation, get in touch with Lawes Financial.

Figures quoted are illustrative only. Your actual outcome will depend on your individual circumstances, loan size, term, and the products available to you.

This is not financial advice. Speak to an independent mortgage broker before making any decisions.

Lawes Financial Limited (FRN 1046161) is an appointed representative of Andrew Charles Consulting Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 304904).

Questions readers ask

Does higher inflation automatically mean my mortgage rate goes up?

Not automatically — mortgage rates are linked to Bank Rate and swap rates, not to the CPI figure directly. Inflation is one of the things the Monetary Policy Committee weighs when it sets Bank Rate, alongside many other factors; any change to Bank Rate, up or down, passes through to tracker rates and can move fixed-rate pricing too.

I'm on a fixed rate — does this inflation figure affect me now?

A fixed rate already agreed does not change during its term, so the September CPI figure has no immediate effect on your current payments. What it may affect is the rate you are offered when that deal ends, since lenders price new fixed deals from swap rates, which can move before Bank Rate does.

What are swap rates and why do they matter for fixed mortgages?

Swap rates reflect what financial markets expect Bank Rate to do over time, and lenders use them to price fixed-rate mortgages. They can move up or down before any Bank Rate decision is announced, which means fixed-rate pricing can shift even when Bank Rate itself is unchanged.

When is the next Bank Rate decision?

The next Bank Rate decision is due on 5 November 2026 (Bank of England, October 2026). The outcome has not been decided — the Monetary Policy Committee will consider the full picture at that meeting, including the latest inflation data.