Despite the Bank announcing the largest jump in interest rates in 33 years, lending giant Halifax said it would reduce several remortgage rates by up to 0.24 per cent from next week, with rates now starting below the 6 per cent threshold.
Clydesdale Bank, an arm of Virgin Money, has also cut rates on its two and five-year mortgages by up to 0.3 percentage points, which will push some rates down to 5.44 per cent. A number of smaller lenders have also cut rates.
MoneySavingExpert founder Martin Lewis warned that mortgage holders could face a £500 shock to their bills as a result of the bump to interest rates, imploring policymakers to look at ways to “mitigate the damage” of the cost of living crisis and recessionary shocks to those most vulnerable to them.
Hi, we’re wrapping up the live blog for this evening, thanks for following with us.
Welcome to The Independent’s blog on the cost of living crisis for Friday, 4 November 2022, where we provide the latest updates on the economic situation unravelling in the UK amid the interest rates spike by the Bank of England.
Jeremy Hunt ‘considering rise in capital gains’ to fix £50bn chasm
Chancellor Jeremy Hunt is looking at raising taxes on the sale of assets such as shares and property as he weighs up “difficult decisions” to address a £50bn black hole in the public finances.
He is also considering an increase in dividend tax, in a move that would come as a blow to entrepreneurs.
A source close to Mr Hunt confirmed the tax hikes were under consideration, but said no decisions had yet been taken - stressing “we are two weeks away” from the highly-anticipated autumn budget.
My colleague Andy Gregory reports:
Chancellor warns of ‘difficult decisions’ in fight to ‘restore stability’
Britain facing ‘prolonged pain’ as Bank says recession could stretch into 2024
The Bank raised interest rates by 0.75 per cent to 3 per cent on Thursday, leaving homeowners with the biggest single shock to their mortgage bills in more than three decades.
Money Saving Expert founder Martin Lewis said mortgage-holders on variable rates face an additional £480 a year for every £100,000 of their loan.
Read the details in this joint report from Andrew Woodcock and Thomas Kingsley:
‘Everyone will be affected’: Hike in housing costs and increased inflation to hit hard
Footfall stumbles amid rising prices and tightening purse strings
Footfall took a stumble in its slow return to pre-pandemic levels as rising prices and tightening purse strings meant fewer consumers made trips to the shops, figures show.
Total UK footfall was down 11.8 per cent on October three years ago – a comparison to iron out pandemic discrepancies – two percentage points worse than September, according to British Retail Consortium (BRC)-Sensormatic IQ data.
High Street footfall was down 11.6 per cent, although this was 0.3 percentage points better than last month’s rate and an improvement on the three-month average decline of 11.9 per cent.
Read the details in this report:
Total UK footfall was down 11.8% on October three years ago, according to British Retail Consortium-Sensormatic IQ data.
Pound falls after Bank of England hikes interest rates
Sterling fell 1.4 per cent to 1.123 against the US dollar, and was 0.8 per cent lower against the euro at 1.15.
Jane Dalton reports:
Sterling drops 1.4% against US dollar after decision-makers warn of longest recession on record
Interest rates: Starmer warns of ‘Tory premium on mortgages’
Labour leader Sir Keir Starmer said that families were now facing “a Tory premium on mortgages”, with the 0.75 point rise to 3 per cent in the Bank’s base rate likely to be passed on in the form of more expensive home loans.
As chancellor Jeremy Hunt issued a further signal of austerity measures to come in this month’s autumn statement, there were warnings from business not to repeat the mistakes of the early 2010s by cutting government investment.
Our political editor Andrew Woodcock has more:
Chancellor Jeremy Hunt confirms more pain to come in autumn statement
Expand free school meals to combat ‘devastating’ cost of living impact, health experts urge
The availability of free school meals has to be extended to all children in households on universal credit to combat the “devastating impact” of the cost of living crisis, ministers have been told.
More than 35 healthcare leaders and charity bosses have written to the chancellor, Jeremy Hunt, and the education secretary, Gillian Keegan, demanding an “urgent” expansion of the free school meals scheme to “improve children’s nutrition and protect their health”.
More in this report:
Feed the Future: ‘Offering children healthy food should be one of the basic things we are getting right’
Editorial: The consequences of interest rate hike will be huge for the vulnerable
The consequences of the 0.75 per cent interest rate hike will be huge for those who are exposed to them – primarily the relatively small number of people on tracker mortgages, and those with businesses on tracker loans. Such a hike is likely to add £100 a month to a typical mortgage.
Read more here:
Editorial: Jeremy Hunt and Rishi Sunak have one major economic task to accomplish: undo the damage of their predecessors
ICYMI: UN envoy warns Sunak against ‘troubling’ austerity cuts
Olivier de Schutter, the UN rapporteur on extreme poverty, said he was “extremely troubled” by the prospect of public spending cuts – as the prime minister looks to balance the books after the disastrous mini-Budget.
Mr Sunak is believed to be mulling a 50-50 split of spending cuts and tax rises for the 17 November Budget, as he and chancellor Jeremy Hunt address a black hole of up to £50bn.
My colleague Adam Forrest has more:
‘Worst time’ for UK to impose spending cuts, says UN rapporteur
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