Barclays increases rates by 0.2%: "Cynics may think the lender is profiteering from the improvements in the money markets"

More ups than downs from lenders but not the kind of ups borrowers want to see. Another mainstream lender in increasing rates following on from NatWest and Santander. No doubt this is causing a lot of confusion amongst those looking to lock into current mortgage rates. Now more than ever, borrowers may need to rely on brokers to continue to monitor rate fluctuations. The mortgage market is currently moving very fast and can change very quickly.

The news of Barclays increasing its fixed-rate mortgage rates, despite recent inflation data and talk of potential base rate cuts, is indeed surprising and likely causing confusion among many borrowers. Unfortunately macro level events have had an impact and the globalisation of financial services means we are not immune to events occuring across the world. Lenders are now worried about costs rising and therefore locking in increased rates now to "price" these events into their bottom line.

Barclays are not the first lender to increase rates this week, but they are the first to do so since the lower-than-expected inflation rate and the consequent fall in Swap rates on Wednesday. This may be simply tough timing on the part of the lender. However, cynics may think the lender is profiteering from the improvements in the money markets. That first Labour Budget will be the biggest influence on mortgage rates, but other lenders may soon look to reverse the increases seen over the past few weeks beforehand.

Barclays are looking to squeeze every last penny possible out of borrowers before the Bank of England reduces the base rate in early November. Other lenders will likely soon do the opposite to get ahead of the curve and be in pole position.

Barclays may well be bracing themselves for Rachel Reeves' potential Truss moment. Even with the better-than-expected inflation figures released Wednesday, Barclays are looking like they expect they believe the fall-out from this month's Budget to be painful. Whether this is them not wanting to get burnt by the Budget or having a couple of weeks profiteering due to the considerable fall in SWAP rates yesterday, that's down to the borrowers to decide, but knowing how fast a lender can change rates I feel it's the latter.