The Government has steadfastly refused to take any blame for the hikes in mortgage rates claiming that rates had been rising all year and the latest raises were part of that trend.
Following the Government’s mini-Budget lenders pulled products en-masse in the face of market volatility which made accurate pricing increasingly difficult.
At the time of writing there are still almost 1,000 less mortgage products on the market as there had been before the mini-Budget.
But Chief Secretary to the Treasury Chris Philps, when answering a question from Shadow Secretary Rachel Reeves on the rate rises, seemed to blame the Bank of England for not increasing the base rate quick enough.
He said: “Mortgage rates around the world have been on an upward trajectory all year. In fact if we compare base rates between the United Kingdom and United States she will be aware that in both countries the base rate started the year at 0.25%.
“In the UK it is 2.25%, in the US it is 3.25%, a full percentage point higher.”
While Business Secretary Jacob Rees-Mogg, speaking on Radio 4 this morning, also refused to accept that the mini-Budget had caused market turmoil.
Rees-Mogg also laid the blame on the central bank. He said: “I would point to the day before, when the monetary policy committee did not put up interest rates as much as the Federal Reserve had.
“And that was the more profound effect on markets. That’s an actual price and that was a widening of the differential between the benchmark which is effectively the US, the low-risk investment and the UK.”
So far this week the Bank of England has made two market interventions as part of its bond buying operation.
The scheme is due to end on Friday.
