Kwasi Kwarteng holds crisis talks with mortgage lenders as average five-year fix soars above 6% for the first time in a decade – heaping pressure on struggling households

  • Kwasi Kwarteng meeting mortgage lenders as rates for Britons continue to soar
  • The average five-year fixes has topped 6 per cent for the first time since 2010
  • Prices are spiking as markets expect the Bank of England will hike base rate 

Kwasi Kwarteng is holding crisis talks with mortgage lenders today as the average five-year fix topped 6 per cent for the first time in a decade. 

The Chancellor is meeting high street lenders and the largest challenger banks after his mini-Budget fuelled a plunge in the Pound and market mayhem.

A swathe of mortgage deals have been pulled and rates hiked as institutions factor in expectations that the Bank of England will take tougher action to curb inflation.

Yesterday the rate on a typical two-year fixed mortgage surged past 6 per cent for the first time in 14 years, on the same day that Liz Truss told the Conservative Party conference that the Government was pursuing ‘difficult but necessary’ decisions.

According to Moneyfacts.co.uk, the average five-year fixed-rate mortgage had crept up to 6.02 per cent today – the first time it has crested 6 per cent since February 2010.

Yesterday the rate on a typical two-year fixed mortgage surged past 6 per cent for the first time in 14 years – suggesting many households will be spending a quarter of their income on servicing loans

Kwasi Kwarteng (pictured in Downing Street yesterday) is meeting high street lenders and the largest challenger banks after his mini-Budget fuelled a plunge in the Pound and market mayhem

HSBC, Santander and Virgin Money are among the lending giants that had withdrawn products from the market for new borrowers since the Government unveiled its mini-budget.

Yesterday the rate on a typical two-year fixed mortgage surged past 6 per cent for the first time in 14 years, on the same day that Liz Truss told the Conservative Party conference that the Government was pursuing ‘difficult but necessary’ decisions.

According to Moneyfacts.co.uk, the average five-year fixed-rate mortgage had crept up to 6.02 per cent today – the first time it has crested 6 per cent since February 2010.

The average two-year fixed-rate mortgage is 6.11 per cent, having topped the 6 per cent mark yesterday in a new peak since November 2008.

However, the choice of mortgages seems to be gradually improving, with 2,371 products available yesterday, up from 2,358 on Tuesday.

Mr Kwarteng is expected to quiz bank chiefs on their plans to soothe the market and prevent further mortgage deals being pulled.

Liz Truss told the Conservative Party conference yesterday that the Government was pursuing ‘difficult but necessary’ decisions

He is also set to discuss elements of his growth plan, which strives to stimulate economic growth and improve UK competitiveness by reducing ‘burdensome’ regulation and taxes on businesses.

It is the latest in a string of meetings that Mr Kwarteng has arranged with the banking giants since he stepped into the ministerial role.

Early in September, he had an hour-long meeting with City leaders to caution them over the Government’s plans to ramp up short-term borrowing to fund the energy support package.

At the time, he said he was ‘committed to taking decisive action to help the British people now, while pursuing an unashamedly pro-growth agenda’.

The Chancellor also summoned the top investment banks including JP Morgan, Citigroup and Morgan Stanley to prepare them for his deregulatory plans, known as Big Bang 2.0.

In a round of interviews this morning, Tory party chairman Jake Berry stressed the government’s bailout for energy bills, suggesting that will help families deal with mortgage rates.

He told Times Radio: ‘It’s very likely if you look at global trends that interest rates set by the independent Bank of England would have gone up over the coming months ahead in any event, so imagine if the Government hadn’t have acted.

‘Imagine if families were faced with a £6,000 energy bill that they couldn’t afford and their mortgages going up. That would be completely unsustainable.

‘Whilst the Bank of England is independent, the Prime Minister also made clear in her speech that her and the Chancellor would work with the Bank to try and ensure that the mortgage market remains stable while always ensuring that the governor maintains his independence.’

Source: Read Full Article