Markets & Rates
UK Inflation Fell Below Target in September 2024: What It Meant
UK CPI inflation fell to 1.7% in the year to September 2024. Lower inflation improved the rate outlook, but did not reverse earlier machinery price rises.
In this article
Figures published by the Office for National Statistics on 16 October 2024 showed Consumer Prices Index inflation at 1.7% in the 12 months to September, down from 2.2% in August. It was the first reading below the Bank's 2% target since April 2021.
The position at the time
A lower annual rate meant prices were rising more slowly across the measured basket. It did not mean business inputs, imported parts or machinery had returned to their earlier cash prices. Services and wage pressures also remained important to the Bank's assessment.
It is important to read this as a dated market update. It records what was known on 16 October 2024; it is not a current rate quotation or a prediction of the next decision.
What it meant for asset finance
The reading strengthened expectations of lower rates, but equipment pricing still reflected exchange rates, freight, factory costs and dealer stock. A business could therefore see a more encouraging monetary outlook while receiving a higher supplier invoice than a year earlier.
Bank Rate is only one part of a fixed asset-finance price. The funder's cost of money, length of agreement, deposit, asset age, likely resale market and the applicant's ability to repay all sit inside the final figure. That is why two funders can respond differently to the same monetary-policy news.
What it meant for machinery prices
Equipment prices follow their own set of pressures. Currency, freight, energy, wages, components and dealer stock can move independently of Bank Rate. Lower borrowing expectations therefore do not guarantee a lower total purchase cost. A delayed order can save finance cost but lose a supplier discount, delivery slot or season of productive use.
How to make the decision useful
The right comparison was between the present machine and its replacement: repairs, fuel, downtime, output and likely supplier increases. Inflation news helped frame the backdrop, but it could not decide whether a particular asset earned its keep.
Put the monthly finance cost beside measurable changes: extra work, reduced repairs, lower fuel use, avoided hire, released labour and a realistic value for downtime. Use conservative assumptions. If the case only works with perfect utilisation or a hoped-for rate cut, reshape the deposit, term or asset before committing.
Fixed certainty versus waiting
A fixed agreement does not prove that rates will not fall later. It buys a known cost while the asset is working. Waiting can be right where the purchase is optional and the current machine remains dependable. It can be costly where a contract, harvest, construction programme or maintenance standard depends on delivery by a fixed date.
The Buckingham Leasing view
Market news should improve a decision, not make it more complicated. Start with the job the equipment must do and the cash the business needs to retain. We can compare suitable structures using live figures and explain what is fixed, what can change and how long a quotation remains valid.
This article is general information, not financial, tax or investment advice. Finance is subject to status, affordability and terms. Past rate decisions do not predict future pricing.
Source note: Office for National Statistics, Consumer price inflation, UK: September 2024. Historical Bank Rate data is available from the Bank of England; inflation releases are available from the Office for National Statistics.
