- The Bank of England’s surprise 50-basis-point hike will affect millions of homeowners as the interest rates on many mortgages in the U.K. are directly linked to the central bank’s base rate.
- Finance Minister Jeremy Hunt on Friday met with major banks and building societies to discuss the deepening mortgage market crisis.
- Research by the NIESR estimated that the latest rate hike would see 1.2 million U.K. households (4% of households nationwide) run out of savings by the end of the year.
There is intensifying pressure on Britain’s government to do more to help struggling households, with the country’s shadow finance minister warning of a “mortgage catastrophe” as millions are pushed to the brink of insolvency.
The Bank of England last week hiked interest rates by 50 basis points to 5%, a bigger increase than many had expected. The BOE’s 13th consecutive rate rise takes the base rate to the highest level since 2008.
The surprise move — which is designed to lower inflation — will affect millions of homeowners as the interest rates on many mortgages in the U.K. are directly linked to the central bank’s base rate.
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Source: www.cnbc.com
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