Per Bloomberg

The Bank of England has announced that they would be increasing mortgage rates sharply, which would affect four million households. This would result in average borrowers having to pay almost £3,000 yearly.

This comes as Governor Andrew Baily explains the situation, saying that the decision would still come with consequences. He also noted that this would result in households being less likely to spend, along with more debt defaults that could happen.

Bailey: “There will still be consequences from increased interest rates I’m afraid because from a monetary policy perspective, that’s why we have to do it,”

The BOE said that 2023's second half would see fixed-rate deals of £220 more than current rates.

Bailey: “It will take time for the full impact of higher interest rates to come through both in the UK and in other advanced economies... Elements of the global financial system do remain vulnerable to interest rates.”

It was previously reported at the end of 2022 that 1.9 million UK households missed payments or defaulted on at least one mortgage leading to Christmas.

Recently, it was reported that UK debt exceeded its economy, reaching 100.1% of the country's GDP for the first time since 1961.

See flow at unusualwhales.com/flow.

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Bloomberg