Inflation set to breach 3% today-how will you keep business booming?

Inflation set to breach 3% today-how will you keep business booming?



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Inflation figures for May are predicted  to rise above 3 per cent today, further diminishing hopes of an interest rate cut next month. This will be the second time Mervyn King has to write an explanatory letter to Gordon Brown.Analysts are expecting the Consumer Price Index (CPI) to reach around 3.1 per cent, as food costs are rising and there is currently a fuel crisis.

Much of the coverage of the rise focuses on the detriment to the consumer but for the intermediary the rise is set to make business even harder than usual. Mortgages are increasingly difficult to secure, availability is greatly reduced and now with inflation rising there are fears that consumers will see intermediaries as a luxury they can not afford.

Dual pricing has meant that people are already going direct to lenders to get cheaper deals. Whilst in many cases people are not getting the best advice by going direct to lenders, in times where money is tight they are more likely to go the cheapest route even it is not the most effective. For brokers, the mortgage advice market is currently one with little gain. The more niche markets such as commercial or bridging are the ones that consumers will be more likely to take advice on and these are the areas that brokers need to focus on if they want to survive.
 

Lucy Trueick
 

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