Interest rates UK – latest: Lenders cut mortgage rates as banks urged to take action
Halifax and Virgin Money were among the first to announce mortgage rate reductions
Several high street banks have slashed mortgage rates after Bank of England governor Andrew Bailey told lenders that costs did “not need to rise as they have done”.
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.
Money-off scheme for cutting energy use at peak times launches today
Ofgem has backed a National Grid scheme that will allow Britons to earn financial rewards for saving power at times of peak demand.
Households and businesses, which must have smart meters to qualify for the scheme, will be told in advance that they should avoid using energy intensive appliances at a certain point on a particular day.
National Grid, which revealed the service as part of efforts to avoid potential blackouts over the winter months, has said households could save up to £100 through the limited scheme.
My colleague Emily Atkinson has more details:
List of firms taking part in money-off scheme for cutting energy use at peak times
Brexit has slowed economy, says former Bank of England governor
Here is more detail on former Bank of England govenor Mark Carney’s claims that the current interest rate pain is partly due to Brexit.
“What’s happened in the UK and other economies is we’ve had the impact of higher energy prices which has slowed down the rate of pace that the economy can grow, we’ve had the impact of Covid, which has changed the labour market and our capacity to grow,” he told the BBC.
“And then, of course, in the UK – unfortunately - we’ve also had the near-term impact of Brexit, which has slowed the pace at which the economy can grow.
“The economy is operating at a level above its capacity and that’s adding to the inflationary pressures that we’re getting from the war in Ukraine and elsewhere. And the bank needs to slow the economy, which is why it’s raising interest rates.”
Interest rate pain is consequence of Brexit, says former Bank of England governor
Watch: Martin Lewis says he fears spring could be worse than winter
Martin Lewis has warned that he fears the cost of living crisis will hit people harder in the spring than this winter “when the price guarantee ends on energy” and mortgage rates are expected to peak.
You can listen to his comments here:
FTSE 100 buoyed by mining gains
European stocks enjoyed a boost today, closing the week on a high amid reports that China is mulling over reopening its economy, reports Anna Wise.
The FTSE 100 surged by more than 2.5 per cent at one point as investors piled cash into the index’s China-exposed mining giants.
Shares in Anglo American moved more than 10 per cent higher amid the rumours that the Chinese government was looking into an end to its zero-Covid policy and a path to reopening. Meanwhile, Endeavour Mining, Rio Tinto and Antofagasta all made gains above 5 per cent.
The FTSE 100 closed the day up 2.03 per cent, or 146.21 points, at 7,334.84.
FTSE 100 buoyed by mining gains amid China reopening speculation
Pound claws back gains against dollar
The pound managed to claw back gains today, after falling against the US dollar on Thursday in the wake of the Bank of England’s warning that the UK economy was headed for a prolonged recession.
When markets closed on Friday, Sterling was up 1.2 per cent against the US dollar. But it was down 0.46 per cent against the euro.
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