Rising UK inflation may mean higher mortgage rates as markets take fright, homeloan experts say.

The Office for National Statistics (ONS) today said consumer price index (CPI) inflation in the 12 months to August was 3.1%, up from last month’s figure of 2.9%.

Mortgage experts said lenders had priced in the anticipated August rise in CPI, but that further higher-than-expected inflation could spook markets and lead to more rate hikes.

L&C associate director David Hollingworth said: “The rate of inflation was expected to rise in August, so on the face of it these figures will have been anticipated by the market.

“Markets are becoming increasingly sensitive to signs that inflation could prove more stubborn than expected, particularly given ongoing geopolitical uncertainty and higher fuel and energy prices. Consequently, homeowners have had to come to terms with higher mortgage rates and a less favourable mortgage market than just a few months ago.

“Jittery markets could mean further tremors for mortgage rates, and several lenders are already hiking rates for the second time in as many weeks. As things stand, borrowers should expect mortgage rates to remain under upward pressure in the near term.”

Carl Parker, national director at Just Mortgages, said: “Inflation rising again comes as little surprise as the shock to energy supply continues to push up prices.

“While GDP has remained pretty resilient in the face of such volatility, we know the longer-term picture is likely to be less positive – particularly as the Iran conflict rages on and oil prices climb in response. I’m not expecting it to be enough yet to force the hand of the MPC tomorrow with another hold still the likely outcome. However, we do have to prepare for the prospect of a rate rise in the near future if inflation accelerates further.”