Hope for homebuyers as rates fall on UK fixed mortgage deals

Small drops in average rates for two- and five-year fixed mortgages follow easing of inflation rate in June

Borrowers received a glimmer of good news after average rates on new two- and five-year fixed mortgages fell for the first time since May.

News of the small falls came 24 hours after it was announced that UK inflation fell further than expected in June, which immediately prompted speculation that the Bank of England would not raise interest rates by as much as previously expected. The pricing of fixed-rate mortgage deals is closely tied to expectations of future interest rate rises.