Prime Minister Rishi Sunak has called on banks to protect mortgage customers as mortgage rates increase with the Bank of England looking set to keep increasing interest rates as it tries to combat sticky inflation.
The Prime Minister’s call comes at a time when markets are predicting that rates will reach at least 5.75% by the end of the year and could even hit 6% for the first time since early 2001.
A spokesperson for the Prime Minister was reported in The Telegraph as having said: “The Chancellor has made clear his expectation that lenders should live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.”
The spokesperson added: “There do remain a large range of mortgage deals available to the public, but we know this current situation may be concerning for some homeowners and mortgage holders.”
But whilst some economists are predicting a whopping increase to the base rate others are more cautious. Pantheon Macroeconomics said it believes labour market conditions could allow the Bank of England to skip a rate rise in September.
It also believes that it could be in a place to stop its hiking cycle altogether in November leaving interest rates at 5%.
However, in the short term, the Bank looks set to increase rates to from 4.5% to at least 4.75% on June 22nd.
Today the Bank of England’s equivalent in the United States, the Federal Reserve, will be making its decision on interest rates.
Having currently increased interest rates ten times in a row to 5.25%, the Fed is widely expected to skip a further increase this month. However, inflation is significantly lower than the UK’s at 4%.
The Bank of England will be releasing its interest rate decision on June 22nd.
