Bank of England hike interest rates to 5 per cent
It is “absolutely outrageous” that banks are not matching savings with mortgage rates, consumer finance expert Martin Lewis has said.
Mr Lewis, who spoke to the chancellor earlier this week, said he had suggested lenders should be stopped from increasing their profits on the back of interest rates going up.
“They’re putting borrowing up, but they’re not putting savings up by the same amount,” he told ITV’s Good Morning Britain show.
“That seems absolutely outrageous to me, because when the banks were struggling in 2007/2008, we, the state, the taxpayer, bailed them out.”
Elsewhere, Bank of England governor continues to come under fire from senior Tories MPs who say he has been too slow to raise interest rates.
In a searing broadside Andrea Leadsom, an ex-Treasury minister, told The Independent Mr Bailey had “lots of questions” to answer. “Too little too late is the reason inflation is now becoming sticky,” she said and accused the governor of being the “chief ostrich”.
Chancellor Jeremy Hunt has met with lenders to discuss how they can help customers.
‘Absolutely outrageous’ banks are not passing interest savings on while hiking mortgage costs
Martin Lewis has said it seems “absolutely outrageous” that the rates savers are sitting on are lagging behind the rates being charged to borrowers.
The Money Saving Expert founder, who spoke to the chancellor earlier this week, said he had suggested lenders should be stopped from increasing their profits on the back of interest rates going up.
He said: “They’re putting borrowing up, but they’re not putting savings up by the same amount.
“That seems absolutely outrageous to me, because when the banks were struggling in 2007/2008, we, the state, the taxpayer, bailed them out.”
Matt Mathers23 June 2023 11:16
10,000 homes could be repossessed over next 3 years
Some 10,000 houses could be repossessed over the next three years if interest rates hit 6 per cent, a think tank has warned.
The Centre for Economics and Business Research says: “Our ‘high rates’ scenario assumes that the Bank of England meets current market expectations and raises rates as high as 6.25% by early 2024, with the bank rate still standing at 5% by the end of next year.
“Our model shows that this would lead to more than 9,400 additional repossessions between 2023 and 2025 compared to the baseline scenario, implying a total of 61,600 repossessions for the period.”
(Getty Images)
Matt Mathers23 June 2023 10:41
1.2 million households to become insolvent this year due to higher payments
Some 1.2 million households will become insolvent this year as a direct result of higher mortgage payments, a think tank has warned.
Max Mosley, an economist at the National Institute of Economic and Social Research, said: “The rise in interest rates to 5 per cent will push millions of households with mortgages towards the brink of insolvency.
“No lender would expect a household to withstand a shock of this magnitude, so the government shouldn’t either.
“Some investment should be done in forbearance agreements, giving households and lenders the ability to create payment plans that work for each other.”
(Getty Images/iStockphoto)
Matt Mathers23 June 2023 10:35
Millions of borrowers facing bills £6,000 higher than 2 years ago
The Bank of England’s decision to hike interest rates to 5 per cent yesterday means millions of borrowers are facing bills £6,000 higher than they were two years ago.
The Times reports that the cumulative effect of recent rate rises means that those not on a fixed rate are now typically paying around £6,300 more annually.
Economists believe the base rate will have to rise to 6 per cent to hit the Bank’s 2 per cent inflation target.
The Governor of the Bank of England said there is still a chance the UK Government will meet its pledge to halve inflation this year after a welcome drop below double-digits in April (PA)
(PA Wire)
Matt Mathers23 June 2023 09:33
Government must take responsibility for economic woes – Labour
Rishi Sunak’s government must take “responsibility” for the country’s current economic woes, a shadow minister has said.
Labour’s shadow business and consumer minister Seema Malhotra said the UK had been “hit harder” than our countries in terms of inflation.
More comments from the Feltham and Heston MP below:
Matt Mathers23 June 2023 09:32
Consumer confidence improves for firth consecutive month
UK consumer confidence improved for the fifth consecutive month despite rising interest…
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