Rishi Sunak has been warned homeowners face a “serious shock” as the Bank of England prepares to hike interest rates for the 13th time in a row, piling more pressure on struggling mortgage holders.
The Institute of Fiscal Studies (IFS) said 1.4m homeowners – half of whom are under 40 – will see a fifth of their disposable income wiped out by soaring mortgage rates, while trade body UK Finance said it expects 98,500 borrowers to fall behind on payments this year.
Today the central bank is expected to increase the so-called base rate from 4.5 per cent to at least 4.75 per cent, and possibly as high as 5 per cent. The predicted rate rise comes after a shock inflation reading yesterday showed the rate at which prices are rising flatlined in May at 8.7 per cent, instead of an expected fall.
The predicted interest rate change – aimed at bringing spiralling inflation under control – will add further pressure to the bank accounts of millions of homeowners through higher monthly mortgage payments. The average rate on a two-year deal has already shot up to 6.15 per cent, Moneyfacts figures showed yesterday – almost triple the level seen last March.
Influential think tank the IFS warns that the average mortgage holder will be £3,360 worse off a year, or £280 a month, because of the increases, wiping out around a 10th of their disposable income.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Kyrgios to return but keeps focus on Sinner and Swiatek
Nick Kyrgios just wants to speak his truth, man. He does, after all, have his own podcast to go along with his blue tick on X/Twitter, where he is not afraid to add a hot take or two to the big topics. It's hardly a new development.
Slot eyes strong second half as Reds dream of quadruple
Arne Slot did not use the word, though Jurgen Klopp became quite familiar with it.
Isak stars as Newcastle expose Arsenal's failings
A night that was about whether you could take your chances; for goals, and maybe for finals.
Britons splurge £13bn on festive fun – but inflation may leave a nasty hangover
UK retail outlet Next has posted another rise in sales ahead of expectations over the Christmas period, but warned that a price increase is on the cards for 2025 as it looks to overcome raised costs following last year's Budget.
Next posts rise in sales but warns of difficult year ahead
UK retail outlet Next has posted another rise in sales ahead of expectations over the Christmas period, but warned that a price increase is on the cards for 2025 as it looks to overcome raised costs following last year's Budget.
Carney failed to stop Brexit but hopes to save Canada
Mark Carney may enter the race to succeed Justin Trudeau as leader of Canada's Liberal Party.
Trump fails to rule out use of force to take Greenland
US president-elect Donald Trump has refused to rule out using military or economic action to pursue acquisition of the Panama Canal and Greenland.
At least 126 dead in Tibet after powerful earthquake
A powerful 7.1-magnitude earthquake struck the foothills of the Himalayas yesterday near one of Tibet’s holiest cities, killing at least 126 people and flattening hundreds of houses and causing tremors felt in Nepal, Bhutan and India.
Far-right firebrand's ghost will loom large over Europe
The death of Jean-Marie Le Pen should give us a moment to ponder the long march of the French far right and the rise to power of fascistic parties across Europe.
French far-right political leader Le Pen dies at 96
Unrepentant bigot and Holocaust denier Jean-Marie Le Pen founded the National Front and fought for populist policies
