The Bank of England’s latest base rate rise – up 0.25 per cent to 5.25 per cent – has been poorly received by much of the lending industry.
Here’s a selection – and they make uncomfortable reading for the Bank.
Samuel Mather-Holgate of Swindon-based advisory firm Mather & Mother Financial: “Increasing rates, knowing the last rises haven’t been felt yet, and whilst inflation is falling, is absolute lunacy. This further rise will add misery to homeowners and those with business finance. An already lifeless housing market will shrink further into itself, not to reappear until Spring. The Governor needs to get a grip and reverse these hikes before the end of the year.”
Amit Patel, adviser at Welling-based mortgage broker Trinity Finance: “This is unmitigated madness. This is another nail in the coffin for millions of mortgage holders and small to medium-sized businesses that are the lifeblood of the economy. Effectively, the Bank of England is triggering a recession, which is both reckless and irresponsible.”
Michelle Lawson, director at Fareham-based broker Lawson Franchise: “This is no longer a shock any more and I think it is all starting to become a ‘no-news’ item for most people, who are becoming numb to it. The decision to raise again without seeing what the impact of the constant rate rises to date has been, is just puzzling now. It will be interesting to see what happens with the inflation figures on August 16.”
Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages: “Fixed mortgage rates have already priced this increase in so there should not be any lender rate increases and these may even continue to reduce slightly as lenders feel the base rate is close to peaking. Sadly, the positive news on inflation recently has been mainly due to agriculture and fuel and is not down to the Bank of England and their constant hiking of the base rate.”
Jonathan Burridge, founding adviser at hybrid mortgage adviser We Are Money: “There is nothing to see here. The Monetary Policy Committee has acted as predicted, and predictability is essential for a calm market. A calm market means SWAP rates settle and that will mean a drop in fixed rate pricing as we are already starting to see. We are not out of the woods yet, and further rate rises may still be on the horizon.”
Craig Fish, Managing Director at London-based mortgage broker Lodestone: “This latest increase was pointless and ill-thought-out. The only people this is going to affect are those on tracker mortgages. It won’t have any impact on fixed rates at all as this increase is already factored into current offerings. The more important date for mortgage rates is August 16 with the release of the inflation data.”
Anil Mistry, director at RNR Mortgage Solutions: “The outcome was in line with expectations and represents a considerable improvement compared to the initial 0.5 per cent forecast rise. Consequently, this development has exerted a discernible influence on swap rates, causing a decline over the past fortnight. As a direct consequence, mortgage lenders have responded by reducing their interest rates. Should there be no escalation during the upcoming future meetings, there could be optimism that we may witness further reductions in swap rates, potentially leading to a subsequent decline in mortgage rates.”
https://www.introducertoday.co.uk/breaking-news/2023/8/absolute-lunacy–mortgage-industry-responds-to-latest-rate-rise?source=newsticker