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Wasn’t this expected though?
The Bank of England said that they weren’t going to alter interest rates despite a slight interest rise because they believed it was only temporary and would settle back down in a few months.
Obviously though mortgage lenders can do whatever they want. They have a justification for raising rates right now so why wouldn’t they?
I think their decision was influenced by the most recent budget. With business costs rising due to the national insurance increase, banks are anticipating that inflation will fall less quickly, as costs could be passed on to consumers. This is compounded by government spending increasing which also has the potential to have an inflationary effect.
Given this background it is not inconceivable that BoE might need to raise interest rates again and this means the banks need to keep their fixed rates high to cover the risk of people locking in rates that turn out to be too low.
They’re doing this because their accountants ran the numbers multiple times and found there are still millions of pounds left in the economy that are not either in billionaire pockets or secreted in tax havens.
