UK homeowners are warned that years of ultra-low mortgage costs are coming to an end and they now face the biggest increase in costs since the financial crisis.
Homeowners could expect the amount of interest they owe to pay to increase by 13% in 2023, according to forecasts by the government’s independent forecasting unit.
Politicians and analysts grabbed a ‘buried’ table in a report released by the Office for Budget Responsibility (OBR) alongside the budget, which said mortgage interest payments were set for their biggest increase since at least 2008.
Lenders have been pulling their cheapest mortgage deals for some time now, waiting for the Bank of England to raise interest rates to their all-time lows.
Financial markets are already anticipating a rate hike at the Bank of England meeting next week, which could take the base rate to 0.25%, followed by a 0.25 point hike in December. With two more 0.25% hikes slated for next year, that could take the base rate to 1% by the end of 2022.
My colleagues Rupert Jones and Philip Inman have the full story on mortgage cost forecasting here:
Looking ahead later this morning, there is a handful of expected third-quarter GDP data from eurozone economies, as well as the bloc’s inflation numbers for October. Inflation statistics will be closely watched, after the European Central Bank yesterday insisted the rise in inflation was only temporary and pushed back market bets that rates will have to rise early in the month. ‘next year.
Meanwhile, in other overnight news, debt-laden Chinese real estate developer Evergrande reportedly made an interest payment on an offshore bond ahead of a grace period deadline. That means he narrowly avoided a catastrophic default for the second time in a week, according to Reuters.
Evergrande is grappling with some $ 300 billion (£ 218 billion) in liabilities, which has fueled concerns about the impact on the world’s second-largest economy if it were unable to meet its repayments .
You can read the full story here:
09.00 BST Germany flash GDP Q3
09.00 BST Italie flash PIB Q3
09.30 BST Portugal flash PIB Q3
10.00 BST Eurozone Flash Q3 GDP
10.00 BST Eurozone October inflation
13.30 BST US PCE Core Price Index in September