Households are facing a further financial squeeze as borrowing costs lead to lenders upping rates
Average two-year and five-year fixed deals for those with 25 per cent equity or deposit are now expected to rise above 5 per cent in the coming weeks, causing more financial pain for buyers and those trying to re-mortgage.
Many point to the decisions taken in the Autumn Budget to increase the tax burden on businesses as a factor in squeezing growth and increasing the cost of borrowing. National finances could come under even greater strain as a result of US pressure to increase defence spending, with Donald Trump saying Nato members should raise their military expenditure to 5 per cent of GDP.Nick Mendes, broker at John Charcol, said: “While most lenders haven’t yet raised their rates significantly of the back of recent increases in swap rates, there’s no denying the pressure they’re under to do so.
“If international rates rise further we shall see the cost of fixed rates rise, even if the Bank maintains rates or even trims them. However, other experts suggested the uptick is not comparable to when rates soared following Liz Truss’s mini-Budget, especially as some lenders, including HSBC are still reducing rates.
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