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Interest rates and mortgages. SVR mortgage case study

Journalist: Sarah O'Grady, The Daily Express

ended 05. May 2022

I'm looking for short and news quotes on how high the base rate is expected to rise to and how quickly/long will it take to cool inflation/cost of living crisis. Some economists are forecasting another two/three years of rising bills before inflation is controlled by these rate rises.

I'm also looking to speak to a homeowner who faces higher mortgage payments because their mortgage isn't fixed.  I would need an accompanying photo.
 

5 responses from the Newspage community

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Scott Gallacher
Director at Rowley Turton
"While the latest rate rise will increase many people's monthly mortgage payments, I doubt it will do much to cool inflation, which seems to be largely the result of rising energy prices and shortages in both goods and services. I think it's a case of the Bank of England using one of the few tools at its disposal regardless of whether or not it will work as intended. A bit like Maslow's Hammer, "If the only tool you have is a hammer, you tend to see every problem as a nail".
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Rob Gill
Managing Director at Altura Mortgage Finance
"Following the Bank of England announcement on Thursday, our first lender email arrived at 13:05, confirming all tracker rates and the standard variable rate will both be increasing imminently. This is no surprise, and plenty of similar announcements will follow in the hours and days ahead."
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Dominik Lipnicki
Director at Your Mortgage Decisions Ltd
There are many unknowns about the short to medium term future but what we do know is that high levels of inflation are here to stay for many months ahead. The real issue is that in the past, raising the Bank of England base rate would cool an overheating economy and turn, lower inflationwhilst the currenr situation has little to do with an over performing economy, quite the reverse, hence many agree that raising rates will have little effect and at some point teh Bank of England will aslo look at the damage that another rate rise may do to a fragile economy. That said, we could easily see another 0.5% - 0.75% on the base rate this year and that for some borrowers would spell real affordability issues, especially coupled with the cost-of-living crisis.
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Ashley Thomas
Director at Magni Finance
"I wouldn't be surprised if we have another increase or two this year. The big question is how high will it go. With inflation expected to go into double digits, the base rate could go higher than markets were originally anticipating."
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Peter Lowman
Chief Investment Officer at Investment Quorum
"Clearly, the US Federal Reserve Bank have made a policy error by not being aggressive enough with monetary tightening in 2021 when inflation reared its hugely head. Here in the U.K. the Bank of England have already been proactive with interest rate rises and has now raised them again to try and quell rampant inflation. Sadly, corporate profitability and margins are being negatively affected throughout many businesses and charities whilst household incomes are also being impacted, which will hurt the U.K. economy. The words stagflation and recession are bounding around the markets at the moment with UK GDP expected to experience its biggest annual fall since the collapse of the Soviet Union in the 1990s. Whilst its unlikely that a recession will occur this year, there are predictions in the marketplace that we will get a major recession in late 2023 or early 2024. Sadly, the events in eastern Europe are creating a huge amount of uncertainty, therefore, predicting such issues like a recession are difficult. Whilst the Government was very reactive in supporting households, small businesses, and charities in the pandemic, it's becoming quite difficult for the chancellor this time around."